Actuant reported earnings of $0.47 per share in fourth-quarter
fiscal 2014, below the Zacks Consensus Estimate of $0.52 and down
32.9% sequentially. Revenues increased 8.3% driven by acquisitions
and foreign currency translation gains. Core sales were down 1%.
Industrial segment suffered from weak integration solutions
activity and flat demand for Enerpac's industrial tool product
line. Cost and expenses increased 7.3% and 22.6% respectively. For
fiscal 2015, Actuant anticipates headwinds of $0.08 and $0.05 per
share from higher tax rate and foreign currency translation
respectively. Considering all these, we downgrade our
recommendation on Actuant to Underperform from Neutral. However,
the company's policy of rewarding its shareholders through
dividends and share buybacks will work in its favor.
Actuant Corporation (ATU) is involved in the designing,
manufacture and distribution of various industrial products and
systems for its clients in more than 30 countries. Founded in 1910,
the company is headquartered in Menomonee Falls, WI. The company
operated through four segments, prior to the divestment of the
Electrical segment in Dec 2013. The current segments are discussed
Industrial: The segment designs, produces and markets various
hydraulic and mechanical tools to general maintenance and repair,
industrial, infrastructure and production automation markets
through brands like Enerpac, Simplex, Precision Sure-Lock and
Milwaukee Cylinder. The tools help in enhancing productivity while
lowering labor costs.
Energy: The segment deals with technical products and services,
primarily joint integrity tools and connectors, along with cable
and rope solutions, useful to the energy markets. These products
reduce customer downtime and increase safety and reliability in
areas such as wind turbines, refineries, fossil fuel etc. Popular
brands include names like Hydratight, Morgrip, Cortland and Jeyco,
Engineered Solutions: The segment is a global leader in the
designing and assembling of industrial products and motion-control
systems. The segment mainly targets transportation markets with
products like hydraulic cab-tilt and latching systems through
brands like Power-Packer, Gits and Power Gear Brands. Other
products of the segment such as gearboxes, torque limiters, drive
shafts target markets like construction, forestry, aerospace and
Segmental revenues for fiscal 2014 are displayed in the chart
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