Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Jun 22 based on weak
fiscal third quarter 2013 results combined with weak earnings
outlook for the quarters ahead.
Why the Downgrade?
Actuant reported earnings per share of 62 cents in the fiscal
third quarter of 2013, missing the Zacks Consensus Estimate by a
penny. Revenue was reported at $344.2 million, roughly flat
compared with the Zacks Consensus Estimate as well as the
Core sales declined 2%, which were offset by a contribution
from the acquisitions. Foreign currency adjustments were
detrimental to sales growth. Actuant foresees that the core sales
would witness a downward trend in the coming quarters, although
the acquired businesses are expected to counter it.
Actuant expects to see a low GDP growth situation in fiscal
2014, impacting its revenues. It has thereby guided total revenue
in fiscal 2014 to be in the range of $1.315 million to $1.340
million, with earnings per share in the range of $1.95 to $2.05.
However, recently, Actuant made public its intentions to divest
the Electrical segment to focus more on its growth drivers. The
same has now been recorded as discontinued operations in the
Subsequent to the results, Actuant has witnessed a downward
revision for most of its estimates for fiscal years 2013 and
2014. Almost all the estimates have been revised downwards for
fiscal 2013, resulting in a decline of the Zacks Consensus
Estimate by 13.4% to $1.88 per share, over the last 7 days. Same
holds good for fiscal 2014, where the Zacks Consensus Estimate
declined by 14.6% to $2.04 per share for the same period.
Other Stocks to Consider
Not all machinery stocks are performing as poorly as Actuant.
The following stocks with favorable Zacks Rank are performing
well and are worth considering.
Lincoln Electric Holdings Inc.
) carries a Zacks Rank #2 (Buy)
) holds a Zacks Rank #2 (Buy)
Alamo Group, Inc.
) holds a Zacks Rank #2 (Buy).
AGCO CORP (AGCO): Free Stock Analysis Report
ALAMO GROUP INC (ALG): Free Stock Analysis
ACTUANT CORP (ATU): Free Stock Analysis
LINCOLN ELECTRC (LECO): Free Stock Analysis
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