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Middleby (MIDD) Q2 Earnings, Sales Beat Estimates; Up Y/Y

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Machinery behemoth, The Middleby Corporation (MIDD - Free Report) , reported mixed second-quarter 2016 results. Though the company’s bottom line lagged the Zacks Consensus Estimate, the top line surpassed expectations.

The Middleby Corporation (MIDD - Free Report) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

The company’s quarterly earnings of $1.35 cents per share comfortably surpassed the Zacks Consensus Estimate of $1.09. Also, the bottom line improved from the year-ago tally by 39.2%.

On the other hand, Middleby’s net sales surged 33% year over year to $580.5 million. The year-over-year improvement was driven by organic sales growth of 5.1% and acquisition gains of 29.1%, partially offset by 1.1% negative impact from foreign currency translation. Moreover, the top line easily surpassed the Zacks Consensus Estimate of $561 million.

Segmental Details

Middleby reports its net sales under three heads/segments. The segmental results are briefly discussed below.

Revenues from the Commercial Foodservice Equipment Group totaled $321 million, up 11.1% year over year.

Revenues from the Food Processing Equipment Group grew 16.1% year over year to $83.5 million.

Revenues from the Residential Kitchen Equipment Group were $176 million, up 133.1% year over year.

Margins

In the quarter, Middleby’s cost of sales increased 31.7% year over year. This represents 59.8% of net sales compared with 60.4% in the year-ago quarter. Gross margin expanded 60 basis points (bps) year over year to 40.2%. Selling and distribution expenses, as a percentage of revenues, were 10%. General and administrative expenses were 9.8%.

While operating income surged 34.2% year over year, operating margin improved 20 basis points to 19.3%.

Balance Sheet

Middleby exited the second quarter with cash and cash equivalents of $74 million as against $55.5 million in the preceding quarter. Long-term debt decreased 17.5% sequentially to $862.6 million.

MIDDLEBY CORP Price, Consensus and EPS Surprise

MIDDLEBY CORP Price, Consensus and EPS Surprise | MIDDLEBY CORP Quote

Stocks to Consider

Middleby currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry include Illinois Tool Works Inc. (ITW - Free Report) , Metso Corporation and Tennant Company (TNC - Free Report) . Both Illinois Tool Works and Metso Corporation hold a Zacks Rank #2 (Buy), while Tennant Company sports a Zacks Rank #1 (Strong Buy).

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