) reported adjusted earnings per share from continuing operations
of 44 cents in the first quarter of fiscal 2014 (ended Nov 30,
2013), up 7.3% year over year. The earnings, however, missed the
Zacks Consensus Estimate of 46 cents.
On a GAAP basis, earnings per share were recorded at 48 cents
compared with 49 cents a share in the year-ago quarter.
Actuant's net sales in fiscal first quarter 2014 were $339.6
million, up 10.3% year over year and above the Zacks Consensus
Estimate of $336.0 million. Core sales grew 5% year over year and
acquisitions added 6.0%, offset partially by 1% negative foreign
currency translation impact.
Cost & Margins
Actuant's gross profit margin decreased 160 basis points (bps)
year over year to 38.8% due primarily to higher cost of sales
incurred in the quarter. Selling, administrative and engineering
expenses were $81.9 million compared with $74.9 million in the
year-ago comparable quarter. Adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA) increased from
$54.6 million in the year-ago quarter to $58.7 million in the
Actuant's Segment Performance
The Industrial segment revenues were down 2.5% year over year
at $98.6 million. Core sales decreased 2.0% due to lower
integration solutions activity globally. However, Industrial
demand improved mainly in North America and Europe. The segment's
operating profit margin was 27.3%, up 60 bps year over year.
Energy segment's revenues increased 18.8% year over year to
$107.9 million. The increase can be attributed to a 21% gain from
acquisitions, offset by 1% negative currency translation impact
and 1% core sales decline. The segment's operating profit margin
was 8.3%, down 870 bps year over year.
The Engineered Solution segment's revenues increased 14.8%
year over year to $133.0 million. The increase can be attributed
to 15% core sales growth, offset by 1% negative currency
translation impact and 1% negative impact from previously
concluded divestiture. The segment's operating profit margin was
9.9%, up 330 bps year over year.
Balance Sheet/Cash Flow
Exiting fiscal first quarter 2014, Actuant had cash and cash
equivalents of $109.5 million, up from $104.0 million in the
previous quarter. Long-term debt declined 2.5% sequentially to
Cash flow from operations in the quarter was $32.9 million
compared with $12.3 million in the year-ago quarter. Total
capital spending was roughly $11.3 million against $7.7 million
spent in the quarter ended Nov 30, 2012.
During the quarter, Actuant completed divesting its Electrical
segment for $258 million in gross proceeds.
Actuant maintained its fiscal 2014 guidance of earnings per share
in the range of $2.00 to $2.10 and revenues in the range of $1.41
billion to $1.45 billion (including roughly $100.0 million
contribution from Viking, acquired in August). Core sales are
expected to grow by 3-5% over fiscal 2013 and free cash flow is
anticipated at $190 million.
For the second quarter of fiscal 2014, Actuant anticipates
revenues to be in the range of $330.0 million to $340.0 million.
Earnings per share are expected in the range of 29 cents to 33
Actuant currently has a market capitalization of $2.81 billion
and carries a Zacks Rank #2 (Buy). Other stocks worth a watch in
the machinery industry are
Alamo Group, Inc.
Flow International Corp.
). All the three companies also hold a Zacks Rank #2 (Buy).
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