) reported earnings per share from continuing operations of 62
cents in the third quarter of fiscal 2013 (ended May 31, 2013),
missing the Zacks Consensus Estimate of 63 cents by a penny.
However, reported earnings beat the year-ago earnings of 51 cents
per share by 21.6%.
Quarterly revenues of $344.2 million were flat compared with
the Zacks Consensus Estimate of $344.0 million. Core sales
decreased 2.0%, while acquisitions contributed 3.0%.
Cost & Margins:
Actuant's gross profit margin decreased 60 basis points year over
year to 39.8% for the quarter. Selling, general and
administrative expenses were almost flat year over year at $74.3
million in the quarter. Operating margin declined from 17.1% in
the year-ago quarter to 16.6% in the quarter, primarily due to
weak economic conditions.
The Industrial segment posted a 1% year-over-year increase in
revenues to $111.3 million. Core sales increased 2.0% backed by
successful implementation of strategies. However, revenues in
Europe and Asia Pacific declined. The segment's operating profit
margin was 29.1%, increasing 120 basis points year over year.
Energy segment's revenues increased 3% year over year to $99.2
million. The increase can be attributed to a 5% core sales
increase, offset by 2% decline due to currency translation.
Maintenance spending in oil & gas and revenue from cable and
rope activities were instrumental in driving growth. The
segment's operating profit margin was 19.9%, increasing 70 basis
points year over year.
The Engineered Solution segment's revenue decreased 2% to
$133.7 million. Acquisitions contributed 8% to the growth, which
was offset by a 10% decline in core sales. Results reflected
lower OEM production levels for heavy-duty trucks. The segment's
operating profit margin was 9.5%, decreasing 400 basis points
year over year.
Balance Sheet/Cash Flow:
Exiting fiscal third quarter 2013, Actuant's cash and cash
equivalents were approximately $161.4 million, a considerable
increase from the $90.8 million in the previous quarter. Total
long-term debt stood at $382.5 million, declining from $385.0
million reported in the prior quarter.
Cash flow from operations in the quarter was $75.9 million
compared with $77.3 million in the year-ago quarter. Total
capital spending was roughly $7.2 million against $7.0 million
spent in the quarter ending May 2012.
Moreover, during Jun 2013, Actuant announced its plan to
divest the Electrical segment in order to focus on the more
profitable businesses. The segment has been classified as
discontinued operations in the reported quarter.
Actuant expects its growth trajectory to continue in the fiscal
fourth quarter as well, although at a modest rate. Fiscal 2013
total revenue is expected to be in the range of $1.275 billion to
$1.285 billion. For fiscal 2013, earnings per share are expected
to be in the range of $1.85 to $1.90, with free cash flow in the
range of $190-$200 million.
For fiscal 2014, core sales are expected to grow by 3-5% over
fiscal 2013. Revenues are expected to be in the range of $1.315
billion to $1.340 billion, with earnings per share in the range
Actuant currently carries a Zacks Rank #3 (Hold). Other stocks
worth a watch in the machinery industry are
Lincoln Electric Holdings Inc.
Alamo Group, Inc.
), each carrying a Zacks Rank #2 (Buy).
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