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AmpcoPittsburgh (AP) Q3 Earnings Top Estimates, Revenues Lag

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AmpcoPittsburgh Corporation (AP - Free Report) reported third-quarter 2020 earnings per share of 7 cents against a loss of 13 cents in the prior-year quarter. Adjusted earnings per share was 7 cents per share in the quarter, which beat the Zacks Consensus Estimate of 6 cents. Despite the impact of weak demand on the top line, a reduced cost structure owing to restructuring and efficiency improvements led to the improvement in earnings. Notably, this quarter marks the company’s fourth straight quarter of profitability.

Revenues declined 16% year over year to $76 million in the reported quarter and missed the Zacks Consensus Estimate of $78 million. The disappointing performance was primarily due to lower volume of shipments for the Forged and Cast Engineered Products segment on account of pandemic-related customer deferrals in the flat-rolled steel and aluminum markets. Lower demand for other forged engineered products, particularly in the oil and gas market, was also a headwind.

Cost and Margins

Cost of sales slumped 21% year over year to $59 million in the third quarter. Gross profit increased 7% year over year to $16.5 million. Gross margin was 22% compared with the year-earlier quarter’s 17%.
 

AmpcoPittsburgh Corporation Price, Consensus and EPS Surprise

AmpcoPittsburgh Corporation Price, Consensus and EPS Surprise

AmpcoPittsburgh Corporation price-consensus-eps-surprise-chart | AmpcoPittsburgh Corporation Quote

Selling and administrative expenses were down 7% year over year to $11 million. Adjusted operating profit was $178 million in the reported quarter against an operating loss of $94 in the prior-year quarter.

Segment Performance

Forged and Cast Engineered Products: Net sales fell 19% year over year to $54 million as customers deferred shipments for mill rolls in response to pandemic-related market impacts. Weak demand for other forged engineered products, primarily in the oil and gas market, also impacted the segment’s top line.

Operating profit was $1.3 million in the quarter under review against an operating loss of $0.4 million in the prior-year quarter. Despite lower sales and net unabsorbed costs associated with the temporary idling of certain of its forged and cast roll manufacturing facilities in response to lower demand, the segment reported an improvement in operating profit owing to the elimination of the Excess Costs of Avonmore, and a reduced cost structure courtesy of restructuring and efficiency improvements.

Air and Liquid Processing: Net sales were $21 million, down 10% from the prior-year quarter. The segment’s operating profit decreased 1% year over year to $2.3 million.

Financial Performance

AmpcoPittsburgh generated $19.3 million gross proceeds from equity offering in the third quarter. Backed by its cash flow generated year to date and the proceeds for the equity offering, the company lowered total debt to $32.6 million at Sep 30, 2020 from $70.9 as of Dec 31, 2019.

Price Performance

AmpcoPittsburgh's shares have gained 15.9% in the past year compared with the industry’s growth of 0.3%.

Zacks Rank & Other Stocks to Consider

AmpcoPittsburgh carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Industrial Products sector include AGCO Corporation (AGCO - Free Report) , Crown Holdings, Inc. (CCK - Free Report) and iRobot Corporation (IRBT - Free Report) . All of these stocks sport a Zacks Rank #1.

AGCO has an estimated earnings growth rate of 15.4% for the ongoing year. The company’s shares have gained 22% in a year’s time.

Crown Holdings has a projected earnings growth rate of 11.7% for 2020. The company’s shares have appreciated 28% over the past year.

iRobot has an expected earnings growth rate of 18.9% for the current year. The stock has gained 65% in the past year.

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