We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fortune Brands (FBHS) Beats on Q3 Earnings, Lowers '22 Outlook
Read MoreHide Full Article
Fortune Brands Home & Security, Inc. reported third-quarter 2022 earnings before charges/gains of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.70 by 5.3%. On a year-over-year basis, the bottom line increased 20.1%.
In the third quarter, Fortune Brands’ net sales were $2,053.7 million, increasing 3.4% from the year-ago quarter. The improvement was driven by solid performances across most segments. However, the top line missed the consensus estimate of $2,078 million by 1.2%.
Segmental Details
Cabinets’ quarterly net sales grew 20% year over year to $858.2 million. Results were driven by prices across all product categories.
Water Innovations net sales decreased 14% year over year to $635.1 million. This downside was induced by continued inventory destocking and softness in China.
Outdoors & Security’s net sales increased 6% year over year to $560.4 million on the back of favorable pricing across all product categories.
Costs & Expenses
In the third quarter, Fortune Brands’ cost of sales increased 2.4% year over year to $1,310.2 million. The metric represented 63.8% of net sales compared with 64.4% in the year-ago quarter. Selling, general and administrative expenses increased 3.8% to $415.3 million, accounting for 20.2% of the net sales compared with 20.1% a year ago.
Operating income before charges/gains increased 14.2% to $334.9 million. Operating margin before charges/gains was 16.3%, up 150 basis points year over year. Interest expenses increased 60.7% to $33.1 million.
Fortune Brands Home & Security, Inc. Price and Consensus
While exiting the third quarter of 2022, Fortune Brands’ cash and cash equivalents were $345.3 million, down 26.8% from $471.5 million at the end of the fourth quarter of 2021. Its long-term debt increased 20.7% to $2,786.9 million from $2,309.8 million recorded at the end of the fourth-quarter 2021.
In the first nine months of 2022, net cash generated from operating activities was $288.8 million compared with $430.8 million generated in the year-ago period. Capital expenditure amounted to $175.1 million, up from $113.0 million in the year-ago period. Its free cash flow was $122.4 million compared with $352.1 million free cash flow in the year-ago period.
In the first nine months of 2022, Fortune Brands rewarded its shareholders with a dividend payout of $109.8 million, up 1.8% year over year. The amount spent on purchasing treasury stock totaled $531.1 million, up 110%.
Outlook
For 2022, Fortune Brands lowered its full-year outlook due to more-than-anticipated channel inventory reductions and headwinds related to slowing new construction and R&R activity.
FBHS expects sales to decrease 4.5-5.5% compared to 6.5-7.5% stated earlier, from the previous year’s level on the back of its expectation of U.S. home products’ market growth of 3-5% and global home products’ market growth of 2-4%. Earnings before charges/gains are adjusted to $6.20-$6.30 per share from the earlier issued projection of $6.36-$6.50.
For 2022, cash flow from operations is anticipated to be $640.9-$715.9 million compared with $881-$951 million projected earlier, while capital expenditures are likely to be $250-$275 million compared with $300-$330 million projected earlier.
Management anticipates a free cash flow generation of $400-$450 million compared with the previous projection of $590-$630 million.
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 25.5% in the past six months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.4% in the past six months.
Titan International, Inc. presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 0.1% for 2022. The stock has jumped 2.6% in the past six months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Fortune Brands (FBHS) Beats on Q3 Earnings, Lowers '22 Outlook
Fortune Brands Home & Security, Inc. reported third-quarter 2022 earnings before charges/gains of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.70 by 5.3%. On a year-over-year basis, the bottom line increased 20.1%.
In the third quarter, Fortune Brands’ net sales were $2,053.7 million, increasing 3.4% from the year-ago quarter. The improvement was driven by solid performances across most segments. However, the top line missed the consensus estimate of $2,078 million by 1.2%.
Segmental Details
Cabinets’ quarterly net sales grew 20% year over year to $858.2 million. Results were driven by prices across all product categories.
Water Innovations net sales decreased 14% year over year to $635.1 million. This downside was induced by continued inventory destocking and softness in China.
Outdoors & Security’s net sales increased 6% year over year to $560.4 million on the back of favorable pricing across all product categories.
Costs & Expenses
In the third quarter, Fortune Brands’ cost of sales increased 2.4% year over year to $1,310.2 million. The metric represented 63.8% of net sales compared with 64.4% in the year-ago quarter. Selling, general and administrative expenses increased 3.8% to $415.3 million, accounting for 20.2% of the net sales compared with 20.1% a year ago.
Operating income before charges/gains increased 14.2% to $334.9 million. Operating margin before charges/gains was 16.3%, up 150 basis points year over year. Interest expenses increased 60.7% to $33.1 million.
Fortune Brands Home & Security, Inc. Price and Consensus
Fortune Brands Home & Security, Inc. price-consensus-chart | Fortune Brands Home & Security, Inc. Quote
Balance Sheet
While exiting the third quarter of 2022, Fortune Brands’ cash and cash equivalents were $345.3 million, down 26.8% from $471.5 million at the end of the fourth quarter of 2021. Its long-term debt increased 20.7% to $2,786.9 million from $2,309.8 million recorded at the end of the fourth-quarter 2021.
In the first nine months of 2022, net cash generated from operating activities was $288.8 million compared with $430.8 million generated in the year-ago period. Capital expenditure amounted to $175.1 million, up from $113.0 million in the year-ago period. Its free cash flow was $122.4 million compared with $352.1 million free cash flow in the year-ago period.
In the first nine months of 2022, Fortune Brands rewarded its shareholders with a dividend payout of $109.8 million, up 1.8% year over year. The amount spent on purchasing treasury stock totaled $531.1 million, up 110%.
Outlook
For 2022, Fortune Brands lowered its full-year outlook due to more-than-anticipated channel inventory reductions and headwinds related to slowing new construction and R&R activity.
FBHS expects sales to decrease 4.5-5.5% compared to 6.5-7.5% stated earlier, from the previous year’s level on the back of its expectation of U.S. home products’ market growth of 3-5% and global home products’ market growth of 2-4%. Earnings before charges/gains are adjusted to $6.20-$6.30 per share from the earlier issued projection of $6.36-$6.50.
For 2022, cash flow from operations is anticipated to be $640.9-$715.9 million compared with $881-$951 million projected earlier, while capital expenditures are likely to be $250-$275 million compared with $300-$330 million projected earlier.
Management anticipates a free cash flow generation of $400-$450 million compared with the previous projection of $590-$630 million.
Zacks Rank and Stocks to Consider
FBHS currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies are discussed below:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered a four-quarter earnings surprise of 3.4%, on average. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 25.5% in the past six months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.4% in the past six months.
Titan International, Inc. presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 0.1% for 2022. The stock has jumped 2.6% in the past six months.