Back to top

Analyst Blog

We reaffirmed our long-term Neutral recommendation on Actuant Corporation (ATU - Analyst Report) on Apr 2, 2013, as risk reward remains fairly balanced for the stock at this juncture.

Why the reiteration?

Actuant’s earnings per share of 38 cents in fiscal second quarter of 2013, reported on Mar 20, beat the Zacks Consensus Estimate of 37 cents by a penny. However, the results declined by 11.6% year over year, primarily due to seasonality.

Total revenue of $370.4 million in the quarter beat the Zacks Consensus Estimate of $365.0 million by 1.5%. Core sales decreased 6.0% while acquisitions contributed 4.0%. Revenue declined 2.0% compared with the year-ago revenue of 378.0 million.

Estimates have moved equally in either direction for fiscal 2013 and 2014, over the past 30 days. The movements have resulted in unchanged consensus estimates at $2.18 and $2.42 per share for fiscal 2013 and 2014, respectively.

Actuant predicts irregular end-market demand along with an unfavorable market economy for fiscal 2013. Due to this uncertainty, Actuant has pulled down its earlier forecast decline in revenue of 1%-3% to a decline of 3%-5%. It expects EPS to range between $2.15 and $2.25, although the company is skeptical about attaining the earnings within the expected range.

Actuant has a good history of successful acquisitions, which has been of great help for revenue generation. Also, the company is successfully managing its margins, even in adverse scenarios. It is expected that the Engineered Solutions segment will experience margin improvement in the coming quarters as a result of cost reduction efforts as well as higher production levels.

Engineered Solutions segment’s revenue is likely to reduce in the future, leading to a decline in Actuant’s total revenue, due to the divestiture of Nielsen Sessions business unit.

Other Stocks to Consider

Actuant currently carries a Zacks Rank #3 (Hold). Other diversified machinery companies worth a look are Stanley Black & Decker Inc. (SWK - Analyst Report), Kennametal Inc. (KMT - Analyst Report) and Active Power Inc. (ACPW - Snapshot Report); each of which carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%