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Pool Corp (POOL) Tops Q3 Earnings Estimates, Narrows '23 View
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Pool Corporation (POOL - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and the bottom line declined from the prior-year quarter's figure.
Following the results, shares of the company dropped 3.4% during trading hours on Oct 19. Negative investor sentiments were witnessed as the company cited weaker pool construction-related activities and a challenging macroeconomic environment.
Earnings & Revenues Discussion
During the third quarter, the company reported adjusted earnings per share (EPS) of $3.50, beating the Zacks Consensus Estimate of $3.41. In the prior-year quarter, the company reported an adjusted EPS of $4.76.
Pool Corporation Price, Consensus and EPS Surprise
Quarterly net revenues of $1,474.4 million beat the consensus mark of $1,449 million. The top line declined 8.7% year over year. The downside was caused by lower sales volume from reduced pool construction and deferred discretionary replacement activities.
Operating Highlights & Expenses
During the third quarter, the cost of sales came in at $1,045.7 million, down 5.9% from the prior-year quarter’s level. Our estimate for the cost of sales was $1,019.5 million.
During the quarter, gross profits (as a percentage of net sales) declined 210 basis points (bps) year over year to 29.1% from 31.2% reported in the year-ago quarter. Our estimate for the metric was 29.6%.
During the third quarter, operating income declined 26.3% year over year to $194.4 million. Our estimate for operating income was $189.6 million. The operating margin came in at 13.2%, down 310 bps from the prior-year quarter’s level.
Selling and administrative expenses declined 2.3% year over year to $234.3 million. Our estimate for the metric was $240 million.
Net income during the quarter totaled $137.8 million compared with $190.1 million reported in the year-ago quarter. Our estimate for net income was $132.2 million.
Balance Sheet
As of Sep 30, 2023, the company’s cash and cash equivalents amounted to $85.2 million compared with $49.1 million as of Sep 30, 2022. During the quarter, its net long-term debt amounted to $996.1 million compared with $1,500.3 million reported in the year-ago quarter. Goodwill during the quarter came in at $699.3 million compared with $691.8 million reported in the prior-year quarter.
For the first nine months (ended Sep 30, 2023), net cash provided by operating activities amounted to $750 million compared with $307.5 million reported in the prior-year period.
2023 Guidance
For 2023, Pool Corp expects adjusted EPS in the range of $13.15-$13.65 compared with the prior estimate of $13.14-$14.14. The Zacks Consensus Estimate for 2023 earnings is currently pegged at $13.43.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased by 2.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 17.7% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Choice Hotels International, Inc. (CHH - Free Report) carries a Zacks Rank #2 (Buy). CHH has a trailing four-quarter earnings surprise of 3.1% on average. Shares of the company have declined 3.5% in the past year.
The Zacks Consensus Estimate for CHH’s 2023 sales and EPS indicates a rise of 10.8% and 13.9%, respectively, from the year-ago period’s levels.
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Pool Corp (POOL) Tops Q3 Earnings Estimates, Narrows '23 View
Pool Corporation (POOL - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and the bottom line declined from the prior-year quarter's figure.
Following the results, shares of the company dropped 3.4% during trading hours on Oct 19. Negative investor sentiments were witnessed as the company cited weaker pool construction-related activities and a challenging macroeconomic environment.
Earnings & Revenues Discussion
During the third quarter, the company reported adjusted earnings per share (EPS) of $3.50, beating the Zacks Consensus Estimate of $3.41. In the prior-year quarter, the company reported an adjusted EPS of $4.76.
Pool Corporation Price, Consensus and EPS Surprise
Pool Corporation price-consensus-eps-surprise-chart | Pool Corporation Quote
Quarterly net revenues of $1,474.4 million beat the consensus mark of $1,449 million. The top line declined 8.7% year over year. The downside was caused by lower sales volume from reduced pool construction and deferred discretionary replacement activities.
Operating Highlights & Expenses
During the third quarter, the cost of sales came in at $1,045.7 million, down 5.9% from the prior-year quarter’s level. Our estimate for the cost of sales was $1,019.5 million.
During the quarter, gross profits (as a percentage of net sales) declined 210 basis points (bps) year over year to 29.1% from 31.2% reported in the year-ago quarter. Our estimate for the metric was 29.6%.
During the third quarter, operating income declined 26.3% year over year to $194.4 million. Our estimate for operating income was $189.6 million. The operating margin came in at 13.2%, down 310 bps from the prior-year quarter’s level.
Selling and administrative expenses declined 2.3% year over year to $234.3 million. Our estimate for the metric was $240 million.
Net income during the quarter totaled $137.8 million compared with $190.1 million reported in the year-ago quarter. Our estimate for net income was $132.2 million.
Balance Sheet
As of Sep 30, 2023, the company’s cash and cash equivalents amounted to $85.2 million compared with $49.1 million as of Sep 30, 2022. During the quarter, its net long-term debt amounted to $996.1 million compared with $1,500.3 million reported in the year-ago quarter. Goodwill during the quarter came in at $699.3 million compared with $691.8 million reported in the prior-year quarter.
For the first nine months (ended Sep 30, 2023), net cash provided by operating activities amounted to $750 million compared with $307.5 million reported in the prior-year period.
2023 Guidance
For 2023, Pool Corp expects adjusted EPS in the range of $13.15-$13.65 compared with the prior estimate of $13.14-$14.14. The Zacks Consensus Estimate for 2023 earnings is currently pegged at $13.43.
Zacks Rank & Key Picks
Pool Corp has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased by 2.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 17.7% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Choice Hotels International, Inc. (CHH - Free Report) carries a Zacks Rank #2 (Buy). CHH has a trailing four-quarter earnings surprise of 3.1% on average. Shares of the company have declined 3.5% in the past year.
The Zacks Consensus Estimate for CHH’s 2023 sales and EPS indicates a rise of 10.8% and 13.9%, respectively, from the year-ago period’s levels.