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Ferro (FOE) Beats on Q1 Earnings and Sales, Withdraws View

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Ferro Corporation (FOE - Free Report) recorded earnings (as reported) from continuing operations of 19 cents per share for first-quarter 2020, up 90% from earnings of 10 cents a year ago. Results were driven by improved manufacturing efficiency, optimization initiatives and reduced raw material costs.

Barring one-time items, earnings were 26 cents per share for the quarter, surpassing the Zacks Consensus Estimate of 13 cents.

The company recorded revenues of $252.3 million for the quarter, down around 4% year over year. Sales, however, topped the Zacks Consensus Estimate of $245.3 million. The company saw lower sales in its Functional Coatings segment in the quarter.
 

Ferro Corporation Price, Consensus and EPS Surprise

 

Ferro Corporation Price, Consensus and EPS Surprise

Ferro Corporation price-consensus-eps-surprise-chart | Ferro Corporation Quote

 

Segment Highlights

Sales from the Functional Coatings division were $155.4 million in the quarter, down roughly 7% year over year. Gross profit for the unit fell roughly 1% to $47.8 million.

Sales from the Color Solutions unit rose around 1% year over year to $96.9 million. Gross profit climbed 19% year over year $33.8 million.

Financials

Ferro ended the quarter with cash and cash equivalents of $43 million, down around 25% year over year. Long-term debt was $797 million, down roughly 7% year over year.

Outlook

The company has withdrawn its financial guidance for full-year 2020 due to significant uncertainties associated with the coronavirus pandemic. Ferro noted that it is currently not in a position to estimate the duration, impact and recovery in its end-use markets.

The company expects to complete the sale of its Tile Coating Systems business in the second half of 2020. The divestment will allow it to have a portfolio of businesses more targeted to higher growth end-use markets.

Price Performance

Ferro’s shares are down 33.6% over a year, compared with the 22.6% growth of its industry.



 

Zacks Rank & Key Picks

Ferro currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space are Barrick Gold Corporation (GOLD - Free Report) , The Scotts Miracle-Gro Company (SMG - Free Report) and Newmont Corporation (NEM - Free Report) .

Barrick Gold has a projected earnings growth rate of 64.7% for the current year. The company’s shares have rallied roughly 123% in a year. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 63% in the past year. It currently carries a Zacks Rank #2.

Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have surged around 117% in a year. It currently has a Zacks Rank #2.

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