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Why Is Macquarie (MIC) Up 1.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Macquarie (MIC - Free Report) . Shares have added about 1.2% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.

Macquarie Q2 Earnings & Revenues Beat Estimates, Rise Y/Y

Macquarie Infrastructure reported better-than-expected second-quarter 2021 results wherein both earnings and revenues surpassed estimates.

On an adjusted basis, the company’s earnings were 58 cents per share, beating the Zacks Consensus Estimate of 44 cents by 31.8%. The bottom line increased from 53 cents per share reported in the prior-year quarter.

In the second quarter, Macquarie generated revenues of $288.8 million, up 104.7% year over year. The increase was driven by impressive performance across its Atlantic Aviation and MIC Hawaii segments. Product revenues were $58.7 million, marking an increase of 59.5% year over year. Service revenues improved 120.5% to $230 million. The top line beat the Zacks Consensus Estimate of $232 million by 24.7%.

Segment Details

Atlantic Aviation generated revenues of $230 million, up 120.5% year over year and accounted for 79.7% of the company’s overall revenues. The segment’s EBITDA totaled $70.3 million, compared with $16.9 million in the year-ago-quarter.

MIC Hawaii’s revenues were $58.7 million, up 59.5% year over year. It represented 20.3% of overall quarterly revenues. The segment’s EBITDA totaled $11.1 million compared with $7.2 million in the year-ago-quarter.

Operating Costs

In the second quarter, Macquarie’s cost of services surged 239.6% to $99.5 million on a year-over-year basis, whereas cost of product sales increased 107.7% to $37.8 million.

Selling and administrative expenses were $80.8 million, up 10.7% year over year. Overall, operating expenses increased 65.4% to about $253.7 million.

Liquidity & Cash Flow

As of Jun 30, 2021, the company had cash and cash equivalents of $319.7 million, down from $529.6 million sequentially. Long-term debt (net of current portion) was $1,097.9 million, down from $1,103.9 million recorded at the end of the previous quarter. In the first six months of 2021, the company used net cash of $39.5 million from operating activities compared with $69.3 million generated in the prior-year period. In the first six months, the company paid out dividends amounting to $961 million.

Guidance

With its intention to divest Atlantic Aviation and MIC Hawaii segments, the company did not provide any outlook on its business performance and withdrew its previously provided guidance.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Macquarie has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Macquarie has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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