It has been about a month since the last earnings report for Milacron Holdings . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Milacron Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Milacron Q4 Earnings & Revenues Surpass Estimates
Milacron Holdings delivered adjusted earnings per share of 48 cents in the fourth quarter, surpassing the Zacks Consensus Estimate of 37 cents. On a year-over-year basis, earnings declined 18.6%.
Including one-time items, the company reported earnings per share of 8 cents in the fourth quarter, improving 60% from the year-ago quarter’s figure of 5 cents.
Operational Update
Milacron’s revenues fell 4.2% year over year to $311.4 million during the fourth quarter. Revenues beat the Zacks Consensus Estimate of $307 million. Excluding unfavorable effects of currency movements, revenues decreased 1.6% from the prior-year quarter. New orders in the reported quarter declined 13.3% year over year to $274.2 million.
Cost of sales during the fourth quarter went down 4.6% year over year to $228 million from the prior-year quarter. Gross profit decreased 2% year over year to $84 million. Gross margin came in at 27% during the fourth quarter compared with 26% recorded in the year-ago quarter.
Selling, general and administrative expenses declined 16% year over year to $53.3 million. Adjusted EBITDA went down 11% to $53.8 million in the reported quarter from $60.4 million in the prior-year quarter. Adjusted EBITDA margin decreased 130 bps to 17.3% in the fourth quarter.
Segmental Results
Advanced Plastic Processing Technologies: Net sales declined 6.5% year over year to $178 million. Excluding $4.8 million of unfavorable effects of currency movements, sales decreased 3.9% from the prior-year quarter. Adjusted EBITDA was up 5% year over year to $27.1 million.
Melt Delivery and Control Systems: Net sales edged down 1.3% year over year to $102.3 million. Excluding unfavorable effects of currency movements of $2.8 million, sales increased 1.4% from the prior-year period. Adjusted EBITDA declined 22% year over year to $25.2 million.
Fluid Technologies: Sales for the fourth quarter were $31.1 million, flat compared with the prior-year quarter. Sales improved 2.9% from the year-ago period, excluding $0.8 million of unfavorable impacts of currency movements. Adjusted EBITDA was $7.2 million, down from $7.4 million in the year-ago quarter.
Financial Update
Milacron reported cash and cash equivalents of $184 million at the end of 2018, down from $188 million at the end of 2017. The company generated $124.3 million of cash in 2018, compared with $110.4 million in 2017. Long-term debt was $829 million as of Dec 31, 2018, compared with $916 million as of Dec 31, 2017.
2018 Results
Milacron reported adjusted earnings per share of $1.78 in 2018, down 1.7% from $1.81 in the prior year. Earnings beat the Zacks Consensus Estimate of $1.67. Including one-time items, the company reported earnings per share of 58 cents compared with the year-ago quarter’s figure of 2 cents.
Sales increased 2% year over year to $1.26 billion in 2018. Excluding the favorable impact of currency movement, sales for the year increased 1.2% from the 2017 figure. The top line beat the Zacks Consensus Estimate of $1.25 billion.
Outlook
Milacron projects sales to decline 3-4% in 2019, including an anticipated headwind of 1% from foreign currency translation. Adjusted EBITDA margin is forecasted to be 17.5-18%. Free cash flow is expected to be $100-$110 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -37.93% due to these changes.
VGM Scores
Currently, Milacron Holdings has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Milacron Holdings has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Milacron Holdings (MCRN) Down 15.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Milacron Holdings . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Milacron Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -37.93% due to these changes.
VGM Scores
Currently, Milacron Holdings has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Milacron Holdings has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.