We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pool (POOL) Down 2.6% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Pool Corporation (POOL - Free Report) . Shares have lost about 2.6% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is POOL due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Pool Corp’s Q4 Earnings & Revenues Beat Estimates
Pool Corp reported better-than-expected fourth-quarter 2017 results. Adjusted earnings of 21 cents per share in the quarter surpassed the Zacks Consensus Estimate of 17 cents by 23.5%. The bottom line increased a whopping 250% from the year-ago quarter on the back of improved net income.
Quarterly net sales of $510.2 million beat the consensus estimate of $478.4 million by 6.6% and grew 15% year over year. The revenue growth was primarily attributable to growth in the company’s base business.
Segmental Performance
Pool Corp reports operations under two segments, the Base Business segment (constituting majority portion of the business) and the Excluded segment (sale centers excluded from base business).
The Base business segment witnessed sales growth of 13.3% year over year. Operating income in the segment increased 87.6%. Operating margin as a result increased 140 basis points (bps) in the quarter.
The Excluded segment saw net sales of nearly $7 million, up from $1 million in the prior-year quarter. The segment witnessed operating loss of $1.6 billion, wider than the prior-year quarter’s loss of $286 million.
Operating Highlights & Expenses
Cost of sales in the quarter increased 14.9% from the prior-year quarter. Gross profit, as a percentage of net sales, therefore declined 20 bps from the year-ago level.
Operating income increased 77.1% year-over-year to $17.3 million. Operating margin increased 120 bps in the quarter. Selling and administrative expenses also increased 8.6% year over year. Net income was $25.7 million, up from $2.6 million in the year-ago quarter.
Balance Sheet As of Dec 31, 2017
Cash and cash equivalents were $29.9 million, compared with $22 million in the prior year. Total net receivables, including pledged receivables, increased 18% over the prior year, reflective of fourth-quarter sales growth and two acquisitions completed in December.
Long-term debt was $508.8 million, up 16% from the prior year. Goodwill in 2017 increased 3% year over year. Total Inventory levels grew 10% to $536.5 million compared with $486.1 million last year.
Cash provided by operations was $175.3 million in 2017, an increase of $9.9 million due to the increase in net income, partially offset by changes in working capital.
2017 Results
Net sales increased 8% year over year to $2.79 billion. Gross profit reached $805.3 million for the year, a 9% increase from 2016. Gross margin also expanded 10 bps from the year-ago quarter.
Operating income for the year increased 11% to $284.4 million from the prior year. EPS increased 15% year over year.
2018 EPS Expectation
For 2018, the company expects diluted EPS in the range of $5.36 to $5.61.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
Currently, POOL has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
POOL has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Pool (POOL) Down 2.6% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Pool Corporation (POOL - Free Report) . Shares have lost about 2.6% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is POOL due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Pool Corp’s Q4 Earnings & Revenues Beat Estimates
Pool Corp reported better-than-expected fourth-quarter 2017 results. Adjusted earnings of 21 cents per share in the quarter surpassed the Zacks Consensus Estimate of 17 cents by 23.5%. The bottom line increased a whopping 250% from the year-ago quarter on the back of improved net income.
Quarterly net sales of $510.2 million beat the consensus estimate of $478.4 million by 6.6% and grew 15% year over year. The revenue growth was primarily attributable to growth in the company’s base business.
Segmental Performance
Pool Corp reports operations under two segments, the Base Business segment (constituting majority portion of the business) and the Excluded segment (sale centers excluded from base business).
The Base business segment witnessed sales growth of 13.3% year over year. Operating income in the segment increased 87.6%. Operating margin as a result increased 140 basis points (bps) in the quarter.
The Excluded segment saw net sales of nearly $7 million, up from $1 million in the prior-year quarter. The segment witnessed operating loss of $1.6 billion, wider than the prior-year quarter’s loss of $286 million.
Operating Highlights & Expenses
Cost of sales in the quarter increased 14.9% from the prior-year quarter. Gross profit, as a percentage of net sales, therefore declined 20 bps from the year-ago level.
Operating income increased 77.1% year-over-year to $17.3 million. Operating margin increased 120 bps in the quarter. Selling and administrative expenses also increased 8.6% year over year. Net income was $25.7 million, up from $2.6 million in the year-ago quarter.
Balance Sheet As of Dec 31, 2017
Cash and cash equivalents were $29.9 million, compared with $22 million in the prior year. Total net receivables, including pledged receivables, increased 18% over the prior year, reflective of fourth-quarter sales growth and two acquisitions completed in December.
Long-term debt was $508.8 million, up 16% from the prior year. Goodwill in 2017 increased 3% year over year. Total Inventory levels grew 10% to $536.5 million compared with $486.1 million last year.
Cash provided by operations was $175.3 million in 2017, an increase of $9.9 million due to the increase in net income, partially offset by changes in working capital.
2017 Results
Net sales increased 8% year over year to $2.79 billion. Gross profit reached $805.3 million for the year, a 9% increase from 2016. Gross margin also expanded 10 bps from the year-ago quarter.
Operating income for the year increased 11% to $284.4 million from the prior year. EPS increased 15% year over year.
2018 EPS Expectation
For 2018, the company expects diluted EPS in the range of $5.36 to $5.61.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
Pool Corporation Price and Consensus
Pool Corporation Price and Consensus | Pool Corporation Quote
VGM Scores
Currently, POOL has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
POOL has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.