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Global Industrial (GIC) Q4 Earnings Match Estimates, Rise Y/Y

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Global Industrial Company (GIC - Free Report) reported earnings of 40 cents per share in fourth-quarter 2023, in line with the Zacks Consensus Estimate. The bottom line increased 14% from the year-ago quarter’s earnings of 35 cents per share. Contribution from the Indoff acquisition, improved volumes and strength in the e-commerce channel drove the improvement in the quarter.

The company reported net sales of $320 million in the reported quarter, up 23% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $313 million.

Excluding the contribution from Indoff, which was acquired on May 19, 2023, GIC’s organic growth was 5.1% year over year.  Average daily sales were up 5.2%.

Global Industrial Company Price, Consensus and EPS Surprise Global Industrial Company Price, Consensus and EPS Surprise

Global Industrial Company price-consensus-eps-surprise-chart | Global Industrial Company Quote

Operational Update

The cost of sales amounted to $212 million in the fourth quarter, up 27% from the year-ago quarter’s levels. The gross profit totaled $108 million, which was 27% higher than the year-ago quarter’s $94 million. The gross margin was 33.8% during the reported quarter, a 220-basis point contraction from the fourth quarter of 2022. Excluding Indoff, the gross margin in the fourth quarter was 35.9%, 10 basis points lower than the year-ago quarter.

Selling, general and administrative expenses increased 14% year over year to $87 million. The operating profit was $21.4 million in the quarter under review in comparison with the year-ago quarter’s $17.7 million. The operating margin was 6.7% compared with 6.8% reported in the year-ago quarter.  Excluding Indoff, operating income was $19.3 million, a year-over-year improvement of 9.0%.

Cash Position

The company reported cash and cash equivalents of $34 million as of Dec 31, 2023, in comparison with $29 million as of Dec 31, 2022. The company generated around $112 million in cash from operating activities in fiscal 2023 compared with $50 million in 2022.

GIC’s board has approved a 25% hike in its dividend to 25 cents per share. The dividend will be paid on Mar 18, 2024, to shareholders of record at the close of business on Mar 11, 2024.

Fiscal 2023 Results

Global Industrial’s earnings per share declined 10% year over year to $1.84 in 2023 and missed the Zacks Consensus Estimate of $1.85. Total revenues increased 9% year over year to a record $1.27 billion, in line with the consensus estimate. Excluding Indoff, sales were down 0.7% year over year and 0.3% on an average daily sales basis.

Price Performance

Global Industrial’s shares have gained 57.4% in the past year compared with the industry’s 21% growth.

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Zacks Rank and Stocks to Consider

Global Industrial currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Industrial Products sector are Proto Labs, Inc. (PRLB - Free Report) , AZZ Inc. (AZZ - Free Report) and Applied Industrial Technologies (AIT - Free Report) . PRLB currently sports a Zacks Rank #1 (Strong Buy), while AZZ and AIT carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 11% in the past year.

The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 79% in the past year.

Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 32% in the past year.


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