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Macquarie (MIC) Q3 Earnings and Revenues Miss Estimates

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Macquarie Infrastructure Corporation (MIC - Free Report) reported disappointing third-quarter 2020 results wherein both earnings and revenues missed estimates.  

On an adjusted basis, the company’s earnings were 43 cents per share, missing the Zacks Consensus Estimate of 80 cents by 46.3%. Also, the metric declined from 98 cents per share reported in the prior-year quarter.

Macquarie generated revenues of $202 million, down 29.6% year over year.  The decline was attributable to a lackluster performance across its Atlantic Aviation and MIC Hawaii segments. Product revenues were $39 million, marking a decrease of 33% year over year. Service revenues declined 29% to $163 million. Also, the top line missed the Zacks Consensus Estimate of $326 million by 37.9%.

Segment Details

Atlantic Aviation generated revenues of $163 million, down 29% year over year and accounted for 80.7% of the company’s overall revenues. The segment’s EBITDA declined 16% to $54 million.

Revenues in MIC Hawaii were $39 million, down 33% year over year. It represented 19.3% of overall quarterly revenues. The segment’s EBITDA declined 42% to $7 million.

Operating Costs

In the third quarter, Macquarie’s cost of services decreased 48.1% to $54 million on a year-over-year basis, whereas cost of product sales decreased 41.8% to $25 million.

Selling and administrative expenses were $69 million, down 4.2% year over year. Overall, operating expenses declined 29.8% to about $181 million.

Liquidity & Cash Flow

As of Sep 30, 2020, the company had cash and cash equivalents of $429 million, up from $260 million on Dec 31, 2019. Long-term debt (net of current portion) was $1,705 million, up from $1,554 million recorded at the end of 2019. In the first nine months of 2020, the company generated net cash of $114 million from operating activities, down 48.1% year over year.

During the first nine months of 2020, the company paid out dividends amounting to $87 million, representing a 66.3% decrease from the year-ago period’s disbursement.

Major Developments

On Nov 8, 2020, the company entered into a deal to sale its liquid storage and handling business, IMTT, for a total consideration of about $2.685 billion to Riverstone Holdings LLC. The company expects the transaction to be completed in late 2020 or early 2021, subject to customary closing conditions.

As of Sep 30, 2020, the company classified IMTT segment as its discontinued operation for reporting financials.

Guidance

The company stated that it remains confident in the outlook for its operating businesses as the end markets recovers from the effects of the coronavirus-outbreak.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Kaman Corporation (KAMN - Free Report) , Dover Corporation (DOV - Free Report) and IDEX Corporation (IEX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kaman delivered a positive earnings surprise of 43.61%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.

IDEX delivered a positive earnings surprise of 6.80%, on average, in the trailing four quarters.

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