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Kaman's (KAMN) Q2 Earnings & Revenues Miss Estimates, Up Y/Y

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Kaman Corporation (KAMN - Free Report) reported weaker-than-expected results for second-quarter 2018. However, the top- and bottom-line figures improved on a year-over-year basis.

Earnings/Revenues

Quarterly adjusted earnings came in at 54 cents per share, missing the Zacks Consensus Estimate of 62 cents. However, the bottom line came in 12.5% higher than the year-ago tally.

Revenues in the reported quarter were $468.1 million, up 4.3% year over year. However, the top line missed the Zacks Consensus Estimate of $469 million.

Segmental Break-Up

Revenues in the Distribution segment improved 3.9% year over year to $289.5 million. On the other hand, the top-line performance of the Aerospace segment improved 4.9% year over year to $178.6 million.

Kaman Corporation Price, Consensus and EPS Surprise

 

Kaman Corporation Price, Consensus and EPS Surprise | Kaman Corporation Quote

Costs/Margins

Cost of sales in the second quarter was $332.5 million, up 5.7% year over year. Gross profit margin was 29%, down 100 basis points (bps) year over year.

Selling, general and administrative expenses in the reported quarter were $114.3 million, higher than $108 million recorded in the year-ago quarter. Operating margin was 4.5%, down 140 bps year over year.

Balance Sheet/Cash Flow

Exiting the second quarter, Kaman had cash and cash equivalents of $27.6 million, lower than $36.9 million recorded as of Dec 31, 2017. Long-term debt stood at $316.2 million, lower than $391.7 million recorded at the end of 2017.

In first-half 2018, the company generated $93.7 million cash from operating activities, as against $0.2 million cash used in the year-ago period. Capital expenditure totaled $15.8 million, up from $15.2 million recorded in the year-earlier period.

Outlook

Kaman currently predicts that its Aerospace segment will generate revenues of roughly $755 million in 2018. Also, the Distribution segment revenues are projected at $1,135-$1,170 million. Operating margin of the Aerospace segment is estimated to lie within the 16.6-16.8% range. The same for the Distribution segment is estimated to lie in the band of 4.9-5.1%.

Zacks Rank & Stocks to Consider

Kaman currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Industrial Products sector are listed below:

Altra Industrial Motion Corp. (AIMC - Free Report) sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% over the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alamo Group, Inc. carries a Zacks Rank #2 (Buy). The stock came up with an average positive earnings surprise of 6.06% over the preceding four quarters.

Apogee Enterprises, Inc. (APOG - Free Report) is another Zacks #2 Ranked company. The stock generated an average positive earnings surprise of 0.88% during the same time frame.

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