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Fortune Brands (FBHS) Q1 Earnings & Revenues Top Estimates
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Fortune Brands Home & Security, Inc. delivered a positive earnings surprise of 6.8% for the first quarter of 2019.
Earnings before charges/gains were 63 cents per share, beating the Zacks Consensus Estimate of 59 cents. On a year-over-year basis, the bottom line improved 12.5% on the back of sales growth.
Fortune Brands’ net sales were $1,327.9 million, increasing 5.8% from the year-ago figure. The improvement was driven by healthy growth in Plumbing, Cabinets and Doors & Security segments.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Also, the top line surpassed the Zacks Consensus Estimate of $1,309 million.
Segmental Details
The company’s segmental results are discussed below:
The Cabinets segment’s sales increased 2.8% year over year to $573 million. As noted, growth in sales of value products in homecenter, builder direct and dealer business led the improvement.
Plumbing sales jumped 2% to $458.6 million on the back of organic sales growth of 3.5%.
The Doors & Security segment’s sales increased 20% year over year to $296.3 million, backed by gains from buyouts of Fiberon and rise in sales from security products.
Costs & Expenses
In the first quarter, Fortune Brands’ cost of sales before charges/gains increased 7% year over year to $869.1 million. It represented 65.4% of net sales compared with 65% in the year-ago quarter. Selling, general and administrative expenses before charges/gains jumped 0.3% to $312 million and represented 23.5% of the net sales versus 24.8% in the year-ago quarter.
Operating income before charges/gains increased 13.6% year over year to $135.6 million. Operating margin before charges/gains improved 70 basis points to roughly 10.2%. Interest expenses surged 61.2% to $23.7 million.
Balance Sheet
Exiting the first quarter, Fortune Brands’ cash and cash equivalents were $281.2 million, up 7% from $262.9 million at the end of the 2018. Its long-term debt increased 19.9% sequentially to $2,169.7 million.
In first quarter, the company used net cash of $89.7 million from operating activities, reflecting 72.8% increase year over year. Capital expenditure amounted to $27.2 million, down from $37.6 million.
Outlook
For 2019, Fortune Brands anticipates the both U.S. home products market and global market to grow 2-4%.
Sales in the year are expected to increase 6-7.5% from the previous year. Earnings before charges/gains are estimated to be $3.53-$3.77 per share, reflecting growth of 9% at the mid-point.
Zacks Rank & Key Picks
Fortune Brands currently carries a Zacks Rank #4(Sell).
DXP Enterprises delivered average earnings surprise of 46.55% in the trailing four quarters.
Cintas pulled off average positive earnings surprise of 6.09% in the trailing four quarters.
Actuant delivered average earnings surprise of 11.01% in the trailing four quarters.
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Image: Bigstock
Fortune Brands (FBHS) Q1 Earnings & Revenues Top Estimates
Fortune Brands Home & Security, Inc. delivered a positive earnings surprise of 6.8% for the first quarter of 2019.
Earnings before charges/gains were 63 cents per share, beating the Zacks Consensus Estimate of 59 cents. On a year-over-year basis, the bottom line improved 12.5% on the back of sales growth.
Fortune Brands’ net sales were $1,327.9 million, increasing 5.8% from the year-ago figure. The improvement was driven by healthy growth in Plumbing, Cabinets and Doors & Security segments.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise | Fortune Brands Home & Security, Inc. Quote
Also, the top line surpassed the Zacks Consensus Estimate of $1,309 million.
Segmental Details
The company’s segmental results are discussed below:
The Cabinets segment’s sales increased 2.8% year over year to $573 million. As noted, growth in sales of value products in homecenter, builder direct and dealer business led the improvement.
Plumbing sales jumped 2% to $458.6 million on the back of organic sales growth of 3.5%.
The Doors & Security segment’s sales increased 20% year over year to $296.3 million, backed by gains from buyouts of Fiberon and rise in sales from security products.
Costs & Expenses
In the first quarter, Fortune Brands’ cost of sales before charges/gains increased 7% year over year to $869.1 million. It represented 65.4% of net sales compared with 65% in the year-ago quarter. Selling, general and administrative expenses before charges/gains jumped 0.3% to $312 million and represented 23.5% of the net sales versus 24.8% in the year-ago quarter.
Operating income before charges/gains increased 13.6% year over year to $135.6 million. Operating margin before charges/gains improved 70 basis points to roughly 10.2%. Interest expenses surged 61.2% to $23.7 million.
Balance Sheet
Exiting the first quarter, Fortune Brands’ cash and cash equivalents were $281.2 million, up 7% from $262.9 million at the end of the 2018. Its long-term debt increased 19.9% sequentially to $2,169.7 million.
In first quarter, the company used net cash of $89.7 million from operating activities, reflecting 72.8% increase year over year. Capital expenditure amounted to $27.2 million, down from $37.6 million.
Outlook
For 2019, Fortune Brands anticipates the both U.S. home products market and global market to grow 2-4%.
Sales in the year are expected to increase 6-7.5% from the previous year. Earnings before charges/gains are estimated to be $3.53-$3.77 per share, reflecting growth of 9% at the mid-point.
Zacks Rank & Key Picks
Fortune Brands currently carries a Zacks Rank #4(Sell).
Some better-ranked stocks in the space are DXP Enterprises, Inc. (DXPE - Free Report) , Cintas Corporation (CTAS - Free Report) and Actuant Corporation . While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Cintas and Actuant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DXP Enterprises delivered average earnings surprise of 46.55% in the trailing four quarters.
Cintas pulled off average positive earnings surprise of 6.09% in the trailing four quarters.
Actuant delivered average earnings surprise of 11.01% in the trailing four quarters.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>