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Ferro's (FOE) Stock Rallies on Q4 Earnings and Revenue Beat

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Ferro Corporation’s shares rose after the company came up with its fourth-quarter 2020 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

The Ohio-based company saw sustained improvement in demand in the quarter as global markets rebounded from the pandemic-led shutdowns. It also provided an upbeat guidance for 2021. Its shares rose 3.4% last Friday on the better-than-expected results and have also shot up roughly 8.8% since the earnings release.

Earnings and Revenues Discussion

The company logged earnings (as reported) from continuing operations of 8 cents per share for the fourth quarter compared with a loss of 3 cents a year ago.

Barring one-time items, earnings were 25 cents per share for the quarter, surpassing the Zacks Consensus Estimate of 21 cents.

The company recorded revenues of $260 million for the quarter, up around 6% year over year. Sales topped the Zacks Consensus Estimate of $244.6 million. The company saw higher sales across its segments in the quarter. It witnessed strong demand for its automotive, industrial, construction, electronics and porcelain enamel products.

Ferro Corporation Price, Consensus and EPS Surprise

 

Ferro Corporation Price, Consensus and EPS Surprise

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

Segment Highlights

Sales from the Functional Coatings division were $166.9 million in the quarter, up roughly 5% year over year. Gross profit for the unit rose 4% to $49.8 million.

Sales from the Color Solutions unit rose around 9% year over year to roughly $93.1 million. Gross profit went up roughly 8% year over year $29.8 million.

FY20 Results

Earnings (as reported) for full-year 2020 was 35 cents per share, compared with earnings of 41 cents per share a year ago. Revenues dropped around 6% year over year to $959 million for the full year.

Financials

Ferro ended 2020 with cash and cash equivalents of $174.1 million, up around 81% year over year. Long-term debt was $791.5 million, down roughly 1% year over year.

Outlook

The company expects adjusted EBITDA of $175-$185 million for 2021, indicating a 14-20% year-over-year increase. Adjusted earnings per share are projected in the band of 90 cents to $1.00 for 2021, reflecting a 11-23% year-over-year rise.

Zacks Rank & Key Picks

Ferro currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 95.4% for the current fiscal. The company’s shares have surged around 189% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP Group has a projected earnings growth rate of 69.3% for the current fiscal year. The company’s shares have shot up around 78% in a year. It currently carries a Zacks Rank #1.

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied around 108% in the past year. It currently carries a Zacks Rank #2 (Buy).

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