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Pool Corp (POOL) Q4 Earnings Beat Estimates, Revenues Miss
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Pool Corporation (POOL - Free Report) reported fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined from the prior-year quarter's figure. The company’s results were affected by lower sales volumes of discretionary pool products, attributed to a decline in pool construction and discretionary replacement activities. Following the results, the company’s shares dropped 2.6% during trading hours on Feb 22.
Earnings & Revenues Discussion
During the third quarter, the company reported adjusted earnings per share (EPS) of $1.30, beating the Zacks Consensus Estimate of $1.28. In the prior-year quarter, the company reported an adjusted EPS of $1.79.
Quarterly net revenues of $1 billion missed the consensus mark of $1.02 billion. The top line declined 8.5% year over year. The downside was caused by lower sales volume from reduced pool construction activities.
Pool Corporation Price, Consensus and EPS Surprise
During the fourth quarter, the cost of sales came in at $709.3 million, compared with $780.2 million reported in the prior-year quarter. Our estimate for the cost of sales was $735.4 million.
During the quarter, gross profits (as a percentage of net sales) declined 50 basis points (bps) year over year to 29.3% from 28.8% reported in the year-ago quarter. Our estimate for the metric was 27.6%.
During the fourth quarter, operating income declined 26.1% year over year to $79.3 million. Our estimate for operating income was $84.1 million. The operating margin came in at 7.9%, down 190 bps from the prior-year quarter’s level.
Selling and administrative expenses increased 2.9% year over year to $214.4 million. Our estimate for the metric was $195.9 million.
Net income during the quarter totaled $51.4 million compared with $71.9 million reported in the year-ago quarter. Our estimate for net income was $51.8 million.
Balance Sheet
As of Dec 31, 2023, the company’s cash and cash equivalents amounted to $66.5 million compared with $45.6 million as of Dec 31, 2022. During the quarter, its net long-term debt amounted to $1.02 billion compared with $1.4 billion reported in the year-ago quarter. Goodwill during the quarter came in at $700 million compared with $692 million reported in the prior-year quarter.
As of Dec 31, 2023, net cash provided by operating activities amounted to $888.3 million compared with $484.9 million reported in the prior-year period.
2023 Highlights
Net sales in 2023 came in at $5.54 billion compared with $6.2 billion in 2022.
Operating income in 2023 came in at $746.6 million compared with $1.03 billion in 2022.
In 2023, adjusted EPS came in at $13.18 compared with $18.43 in the previous year.
2024 Guidance
For 2024, Pool Corp expects adjusted EPS in the range of $13-$14. The Zacks Consensus Estimate for 2024 earnings is currently pegged at $14.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 71.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14.1% and 44%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 25.2% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 39.8% in the past year.
The Zacks Consensus Estimate for CCL’s 2024 sales indicates a rise of 13.8% from the year-ago levels.
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Pool Corp (POOL) Q4 Earnings Beat Estimates, Revenues Miss
Pool Corporation (POOL - Free Report) reported fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined from the prior-year quarter's figure. The company’s results were affected by lower sales volumes of discretionary pool products, attributed to a decline in pool construction and discretionary replacement activities. Following the results, the company’s shares dropped 2.6% during trading hours on Feb 22.
Earnings & Revenues Discussion
During the third quarter, the company reported adjusted earnings per share (EPS) of $1.30, beating the Zacks Consensus Estimate of $1.28. In the prior-year quarter, the company reported an adjusted EPS of $1.79.
Quarterly net revenues of $1 billion missed the consensus mark of $1.02 billion. The top line declined 8.5% year over year. The downside was caused by lower sales volume from reduced pool construction activities.
Pool Corporation Price, Consensus and EPS Surprise
Pool Corporation price-consensus-eps-surprise-chart | Pool Corporation Quote
Operating Highlights & Expenses
During the fourth quarter, the cost of sales came in at $709.3 million, compared with $780.2 million reported in the prior-year quarter. Our estimate for the cost of sales was $735.4 million.
During the quarter, gross profits (as a percentage of net sales) declined 50 basis points (bps) year over year to 29.3% from 28.8% reported in the year-ago quarter. Our estimate for the metric was 27.6%.
During the fourth quarter, operating income declined 26.1% year over year to $79.3 million. Our estimate for operating income was $84.1 million. The operating margin came in at 7.9%, down 190 bps from the prior-year quarter’s level.
Selling and administrative expenses increased 2.9% year over year to $214.4 million. Our estimate for the metric was $195.9 million.
Net income during the quarter totaled $51.4 million compared with $71.9 million reported in the year-ago quarter. Our estimate for net income was $51.8 million.
Balance Sheet
As of Dec 31, 2023, the company’s cash and cash equivalents amounted to $66.5 million compared with $45.6 million as of Dec 31, 2022. During the quarter, its net long-term debt amounted to $1.02 billion compared with $1.4 billion reported in the year-ago quarter. Goodwill during the quarter came in at $700 million compared with $692 million reported in the prior-year quarter.
As of Dec 31, 2023, net cash provided by operating activities amounted to $888.3 million compared with $484.9 million reported in the prior-year period.
2023 Highlights
Net sales in 2023 came in at $5.54 billion compared with $6.2 billion in 2022.
Operating income in 2023 came in at $746.6 million compared with $1.03 billion in 2022.
In 2023, adjusted EPS came in at $13.18 compared with $18.43 in the previous year.
2024 Guidance
For 2024, Pool Corp expects adjusted EPS in the range of $13-$14. The Zacks Consensus Estimate for 2024 earnings is currently pegged at $14.
Zacks Rank & Key Picks
Pool Corp has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 71.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14.1% and 44%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 25.2% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 39.8% in the past year.
The Zacks Consensus Estimate for CCL’s 2024 sales indicates a rise of 13.8% from the year-ago levels.