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Luxfer Holdings (LXFR) Misses on Q4 Earnings & Revenues
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Luxfer Holdings PLC (LXFR - Free Report) reported dismal fourth-quarter 2016 results. The quarterly top- and bottom-line performance was primarily affected by adverse foreign exchange impact and soft demand for magnesium-based products.
Over the last one month, Luxfer Holdings’ shares fell 2.12%, as against the 7.99% gain provided by the Zacks categorized Machinery-General Industrial industry.
Earnings
Quarterly adjusted earnings of 14 cents per American Depositary Shares (ADS) were in line with the Zacks Consensus Estimate. However, the bottom line plummeted 48.1% year over year.
Full-year adjusted earnings per ADS came in at 92 cents, as compared with $1.08 reported in the year-ago period.
Revenues
Luxfer’s total revenue came in at $96.1 million, down 10.5% year over year. In addition, the top line missed the Zacks Consensus Estimate of $111 million. The miss stemmed from poor segmental performance.
Full-year 2016 revenues came in at $414.8 million compared with $460.3 million reported in the prior-year period.
Segmental Performance
Revenues from the Gas Cylinders division came in at $51.7 million, down 9.8% year over year. The Elektron division generated revenues of $44.4 million, down 12.1% year over year.
Costs/Margins
Cost of sales during the quarter was $77.5 million, down 7.8% year over year. Gross profit margin contracted 230 basis points (bps) to 19.4%. Operating margin was 5.5%, down 970 bps year over year. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $10.2 million as against $14.6 million recorded in the year-ago quarter.
Full-year 2016 gross margin was 22.5% compared to 22.6% recorded in the prior-year period. Operating margin for full-year 2016 was 8.6% as against 8.2% recorded in the comparable period last year.
Balance Sheet/ Cash Flow
Exiting fourth-quarter 2016, Luxfer had cash and short-term deposits of $13.6 million compared with $36.9 million in the year-earlier period. Net debt increased to $107.4 million from $94.7 million recorded on Dec 31, 2015.
In fourth-quarter 2016, Luxfer generated net cash worth $9.4 million from its operating activities as against $15.2 million recorded in the year-ago quarter. Capital expenditure totaled $4.6 million, plunging 30.3% year over year.
Outlook
Luxfer expects its top line to improve in the upcoming quarters on the back of its strategic growth initiatives. Further, higher demand from European customers and new business contracts are likely to drive revenues. This Zacks Rank #3 (Hold) company also anticipates its near-term earnings to improve on the back of robust sales, lower costs and greater operational efficiency.
Stocks to Consider
Better-ranked stocks within the industry are listed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past four quarters.
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Luxfer Holdings (LXFR) Misses on Q4 Earnings & Revenues
Luxfer Holdings PLC (LXFR - Free Report) reported dismal fourth-quarter 2016 results. The quarterly top- and bottom-line performance was primarily affected by adverse foreign exchange impact and soft demand for magnesium-based products.
Over the last one month, Luxfer Holdings’ shares fell 2.12%, as against the 7.99% gain provided by the Zacks categorized Machinery-General Industrial industry.
Earnings
Quarterly adjusted earnings of 14 cents per American Depositary Shares (ADS) were in line with the Zacks Consensus Estimate. However, the bottom line plummeted 48.1% year over year.
Full-year adjusted earnings per ADS came in at 92 cents, as compared with $1.08 reported in the year-ago period.
Revenues
Luxfer’s total revenue came in at $96.1 million, down 10.5% year over year. In addition, the top line missed the Zacks Consensus Estimate of $111 million. The miss stemmed from poor segmental performance.
Full-year 2016 revenues came in at $414.8 million compared with $460.3 million reported in the prior-year period.
Segmental Performance
Revenues from the Gas Cylinders division came in at $51.7 million, down 9.8% year over year. The Elektron division generated revenues of $44.4 million, down 12.1% year over year.
Costs/Margins
Cost of sales during the quarter was $77.5 million, down 7.8% year over year. Gross profit margin contracted 230 basis points (bps) to 19.4%. Operating margin was 5.5%, down 970 bps year over year. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $10.2 million as against $14.6 million recorded in the year-ago quarter.
Full-year 2016 gross margin was 22.5% compared to 22.6% recorded in the prior-year period. Operating margin for full-year 2016 was 8.6% as against 8.2% recorded in the comparable period last year.
Balance Sheet/ Cash Flow
Exiting fourth-quarter 2016, Luxfer had cash and short-term deposits of $13.6 million compared with $36.9 million in the year-earlier period. Net debt increased to $107.4 million from $94.7 million recorded on Dec 31, 2015.
In fourth-quarter 2016, Luxfer generated net cash worth $9.4 million from its operating activities as against $15.2 million recorded in the year-ago quarter. Capital expenditure totaled $4.6 million, plunging 30.3% year over year.
Outlook
Luxfer expects its top line to improve in the upcoming quarters on the back of its strategic growth initiatives. Further, higher demand from European customers and new business contracts are likely to drive revenues. This Zacks Rank #3 (Hold) company also anticipates its near-term earnings to improve on the back of robust sales, lower costs and greater operational efficiency.
Stocks to Consider
Better-ranked stocks within the industry are listed below:
ACCO Brands Corporation (ACCO - Free Report) has a positive average earnings surprise of 24.74% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past four quarters.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>