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Bear of the Day: Marine Productsd (MPX)

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Marine Products (MPX - Free Report) is the third-largest distributor of sterndrive powerboats in the U.S. The company designs, manufactures and distributes premium-branded Chaparral sterndrive pleasure boats and Robalo outboard offshore fishing boats, and continues to diversify its product line through product innovation and strategic acquisition. MPX is based in Atlanta, GA.d

Q4 Results Disappoint

Back in January, Marine Products reported weaker-than-expected results in its fiscal 2018 fourth quarter.

Earnings of 14 cents missed the Zacks Consensus Estimate and also fell year-over-year. Revenues of $62.1 million lagged behind our consensus as well, and declined 5.4% from the prior-year period.

International sales fell by more than 50% year-over-year to 3.2% of total sales, mostly due to the impact of tariffs enacted last year.

Gross profit for Q4 was about $13 million, and gross margin as a percentage of sales came in at 21% compared to 21.9% in Q4 2017.

However, President and CEO Richard A. Hubbell did note that even though U.S. sales dropped slightly in Q4 compared to the prior year, the U.S. recreational boat market was strong all throughout 2018, which helped benefit Marine Products throughout the year.

Falling Estimates

Analysts have since turned bearish on Marine Products, with two cutting estimates in the last 60 days for the current fiscal year. Earnings are expected to decline 9%, and the Zacks Consensus Estimate has dropped 14 cents during that same time period from $0.89 to $0.75 per share.

This sentiment has stretched into 2020, and our consensus estimate has dropped 15 cents in the past two months.

MPX is now a Zacks Rank #5 (Strong Sell).

Shares of the boat maker are falling too, down about 17% since January. In comparison, the S&P 500 is up 10.5% year-to-date.

If you’re an investor interested in adding a stock from the leisure and recreational industry to your portfolio, consider Malibu Boats (MBUU - Free Report) . Shares of Zacks Rank #2 (Buy) MBUU, which is a designer of sports boats here in the U.S., has gained over 33% since January.

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