On Mar 22, Zacks Investment Research downgraded
) to a Zacks #3 Rank (Hold) from a Zacks Rank #2 (Buy), on weak
earnings outlook for 2013 despite a better-than-expected
second-quarter of 2013.
Why the Downgrade?
Actuant provided weak earnings outlook for fiscal 2013 despite
the company's second quarter 2013 earnings of 38 cents per share
beating the Zacks Consensus Estimate by a penny.
This diversified machinery company expects the current
de-stocking plans of its main vendors, the original equipment
manufacturers (OEMs), in North America to continue in the coming
quarters, thus affecting Actuant's sales. Also, the European
economic condition is not expected to improve in the near term.
Moreover, ATU's revenue and margins are being hurt by mix shift
toward some lower margin business segments.
Actuant fears that the foreign currency adjustments may also
hurt revenues and earnings in future quarter. A slowdown in
revenue from the Energy and Industrial segments due to lack of
demand also remains an overhang.
In light of the above factors, Actuant lowered its fiscal 2013
earnings guidance to a range of $2.15-$2.25 per share from the
previously announced range of $2.20-$2.30. Also, the sales
guidance was pulled down to the range of $1.575 billion-$1.600
billion range from the range of $1.600-$1.625 billion.
Following the results, the Zacks Consensus Estimate for the
fiscal third-quarter of 2013 decreased 3.0% to 65 cents per
Other Stocks to Consider
The following diversified machinery stocks are performing well
and are worth considering.
Avery Dennison Corporation
) holds a Zacks #1 Rank (Strong Buy)
Briggs & Stratton Corporation
) holds a Zacks Rank #2 (Buy)
Active Power Inc.
) holds a Zacks Rank #2 (Buy).
ACTIVE POWER (ACPW): Free Stock Analysis
ACTUANT CORP (ATU): Free Stock Analysis
AVERY DENNISON (AVY): Free Stock Analysis
BRIGGS & STRATT (BGG): Free Stock Analysis
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