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Why Is The Middleby (MIDD) Up 0.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Middleby (MIDD - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is The Middleby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Middleby Q4 Earnings Beat, Revenues Decrease Y/Y
Middleby reported fourth-quarter 2023 adjusted earnings of $2.65 per share, which surpassed the Zacks Consensus Estimate of $2.44. The bottom line increased 3.1% year over year due to lower costs.
Net sales of $1.00 billion missed the consensus estimate of $1.01 billion. The top line dipped 2.2% year over year. Organic revenues in the reported quarter decreased 4.7%. Acquired assets boosted sales by 1.3% while movements in foreign currencies had a positive impact of 1.2%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 62.3% of the net sales) were $627.9 million, down 0.2% year over year. Our estimate for Commercial Foodservice revenues in the fourth quarter was $633.6 million. Organic sales in the reported quarter decreased 2.3%. Buyouts boosted sales 1.4% while foreign-currency translation had a positive impact of 0.8%.
Sales from the Residential Kitchen Equipment Group (representing 18.7% of the reported quarter’s net sales) totaled $189 million, down 12.5% year over year. Results were hurt by inventory de-stocking in the residential business and housing market weakness. Our estimate for segmental revenues was $200.7 million. Organic sales in the quarter under review dropped 14.6%. Favorable foreign currency movements boosted sales 1.8%.
Sales from the Food Processing Equipment Group (representing 19% of the reported net sales) summed $191.7 million, up 2.7% year over year. Our estimate for Food Processing revenues was pegged at $183.3 million. Organic sales in the fourth quarter decreased 1.3% year over year. Acquisitions boosted sales 2.3% while foreign currency movements had a favorable impact of 1.7%.
Margin Profile
In the fourth quarter, Middleby’s cost of sales decreased 3.1% year over year to $621.8 million. Gross profit decreased 0.8% to $386.8 million. The gross margin increased to 38.4% from 37.8% in the year-ago quarter.
Selling, general and administrative expenses decreased 4.4% year over year to $191.6 million. Segment operating income in the fourth quarter rose 2.4% year over year to $192.7 million. Operating margin decreased to 11.4% from 18.2% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Middleby had cash and cash equivalents of $247.5 million compared with $162 million at the end of December 2022. Long-term debt was $2.4 billion at the end of the fourth quarter compared with $2.7 billion in 2022 end.
In 2023, Middleby generated net cash of $628.8 million from operating activities compared with $332.5 million in the year-ago period. Capital expenditure totaled $85.2 million compared with $67.3 in the year-ago period. Free cash flow was $543.6 million in 2023 compared with $265.3 million in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.64% due to these changes.
VGM Scores
Currently, The Middleby has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, The Middleby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
The Middleby belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Xylem (XYL - Free Report) , has gained 4.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Xylem reported revenues of $2.12 billion in the last reported quarter, representing a year-over-year change of +40.6%. EPS of $0.99 for the same period compares with $0.92 a year ago.
For the current quarter, Xylem is expected to post earnings of $0.84 per share, indicating a change of +16.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Xylem. Also, the stock has a VGM Score of C.
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Why Is The Middleby (MIDD) Up 0.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Middleby (MIDD - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is The Middleby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Middleby Q4 Earnings Beat, Revenues Decrease Y/Y
Middleby reported fourth-quarter 2023 adjusted earnings of $2.65 per share, which surpassed the Zacks Consensus Estimate of $2.44. The bottom line increased 3.1% year over year due to lower costs.
Net sales of $1.00 billion missed the consensus estimate of $1.01 billion. The top line dipped 2.2% year over year. Organic revenues in the reported quarter decreased 4.7%. Acquired assets boosted sales by 1.3% while movements in foreign currencies had a positive impact of 1.2%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 62.3% of the net sales) were $627.9 million, down 0.2% year over year. Our estimate for Commercial Foodservice revenues in the fourth quarter was $633.6 million. Organic sales in the reported quarter decreased 2.3%. Buyouts boosted sales 1.4% while foreign-currency translation had a positive impact of 0.8%.
Sales from the Residential Kitchen Equipment Group (representing 18.7% of the reported quarter’s net sales) totaled $189 million, down 12.5% year over year. Results were hurt by inventory de-stocking in the residential business and housing market weakness. Our estimate for segmental revenues was $200.7 million. Organic sales in the quarter under review dropped 14.6%. Favorable foreign currency movements boosted sales 1.8%.
Sales from the Food Processing Equipment Group (representing 19% of the reported net sales) summed $191.7 million, up 2.7% year over year. Our estimate for Food Processing revenues was pegged at $183.3 million. Organic sales in the fourth quarter decreased 1.3% year over year. Acquisitions boosted sales 2.3% while foreign currency movements had a favorable impact of 1.7%.
Margin Profile
In the fourth quarter, Middleby’s cost of sales decreased 3.1% year over year to $621.8 million. Gross profit decreased 0.8% to $386.8 million. The gross margin increased to 38.4% from 37.8% in the year-ago quarter.
Selling, general and administrative expenses decreased 4.4% year over year to $191.6 million. Segment operating income in the fourth quarter rose 2.4% year over year to $192.7 million. Operating margin decreased to 11.4% from 18.2% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Middleby had cash and cash equivalents of $247.5 million compared with $162 million at the end of December 2022. Long-term debt was $2.4 billion at the end of the fourth quarter compared with $2.7 billion in 2022 end.
In 2023, Middleby generated net cash of $628.8 million from operating activities compared with $332.5 million in the year-ago period. Capital expenditure totaled $85.2 million compared with $67.3 in the year-ago period. Free cash flow was $543.6 million in 2023 compared with $265.3 million in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.64% due to these changes.
VGM Scores
Currently, The Middleby has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, The Middleby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
The Middleby belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Xylem (XYL - Free Report) , has gained 4.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Xylem reported revenues of $2.12 billion in the last reported quarter, representing a year-over-year change of +40.6%. EPS of $0.99 for the same period compares with $0.92 a year ago.
For the current quarter, Xylem is expected to post earnings of $0.84 per share, indicating a change of +16.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Xylem. Also, the stock has a VGM Score of C.