It has been about a month since the last earnings report for Macquarie (
MIC Quick Quote MIC - Free Report) . Shares have added about 1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Macquarie due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Macquarie Q1 Earnings and Revenues Beat Estimates
Macquarie reported better-than expected first-quarter 2021 results wherein both earnings and revenues surpassed estimates.
On an adjusted basis, the company’s earnings were 60 cents per share, beating the Zacks Consensus Estimate of 48 cents by 25%. However, the bottom line declined from $1.08 per share reported in the prior-year quarter. In the first quarter, Macquarie generated revenues of $264.2 million, down 7.1% year over year. The decline was attributable to lackluster performance across its Atlantic Aviation and MIC Hawaii segments. Product revenues were $54.6 million, marking a decrease of 9.8% year over year. Service revenues declined 6.4% to $209.6 million. Notably, the top line beat the Zacks Consensus Estimate of $241 million by 9.6%. Segment Details Atlantic Aviation generated revenues of $209.6 million, down 6.4% year over year and accounted for 79.3% of the company’s overall revenues. The segment’s EBITDA increased 2% to $67.3 million. Revenues in MIC Hawaii were $54.6 million, down 9.8% year over year. It represented 20.7% of overall quarterly revenues. The segment’s EBITDA declined 11% to $13.6 million. Operating Costs
In the first quarter, Macquarie’s cost of services decreased 13.2% to $82.2 million on a year-over-year basis, whereas cost of product sales decreased 16.9% to $34.8 million.
Selling and administrative expenses were $77 million, down 12.1% year over year. Overall, operating expenses declined 13.4% to about $227 million. Liquidity & Cash Flow
As of Mar 31, 2021, the company had cash and cash equivalents of $529.6 million, down from $1,828.1 million on Dec 31, 2020. Long-term debt (net of current portion) was $1,103.9 million, down from $1,554.4 million recorded at the end of 2020. In the first three months of 2021, the company generated net cash of $40 million from operating activities, down 22.3% year over year. In the quarter, the company paid out dividends amounting to $961 million.
The company stated that it remains confident in the outlook for its operating businesses as the end markets recover from the effects of the coronavirus outbreak.
For 2021, the company anticipates generating adjusted EBITDA in the range of $245-$260 million for Atlantic Aviation. For the MIC Hawaii segment, it expects to generate adjusted EBITDA in the range of $35-$45 million. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 25.71% due to these changes.
At this time, Macquarie has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Macquarie has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.