) announced that it expects to incur an asset impairment charge
worth $60 million in its fourth quarter 2012 due to poor
performance of its Mastervolt business.
Actuant acquired Netherlands based Mastervolt in 2010 for $158
million. Mastervolt is a designer, developer and global supplier of
highly innovative, branded power electronics, primarily for the
solar and marine markets. The addition of Mastervolt augmented
Actuant's electrical segment's product offerings, including
batteries, generators, battery chargers, inverters, display panels,
wiring and fully integrated systems. It also extended its footprint
in the global marine and European solar markets.
However, the business has performed lower than expected since its
acquisition. The company stated that the charge was warranted due
to its weak performance, reduced long term profit outlook for the
brand and weaker economic conditions in Europe.
More details regarding this impairment charge will be provided on
September 27, 2012 when Actual reports its fourth quarter and
fiscal 2012 results. Excluding the impairment charge, fourth
quarter results are expected to be in the upper end of the previous
guidance range. The company during its third quarter earnings call
had put forward a fourth quarter guidance with sales in the range
of $400 million to $410 million and EPS in the band of 50 cents to
55 cents a share. For the fiscal fourth quarter, the Zacks
Consensus Estimates for sales is at $410 million, at the upper end
of the company guidance. The Zacks Consensus Estimate for EPS is at
54 cents, closer to the upper end of the guidance.
For fiscal 2012, the company estimates sales in the range of
$1.60-1.61 billion and EPS in the $2.03-2.08 range. The Zacks
Consensus Estimates for sales is $1.61 billion, at the upper end of
the guidance and the same for EPS is at $2.07, a penny below the
upper end of the company's guidance.
In the third quarter, Actuant delivered adjusted EPS of 60 cents, a
penny ahead of the Zacks Consensus Estimate and 19% above the
year-ago quarter's EPS of 51 cents. Solid results in the U.S. and
the Energy segment helped offset some end-market softness in Europe
and China. Total revenue of $429 million was in line with the Zacks
Consensus Estimate but 9% above the year-ago revenue of $393
million. Core sales increased 4% and acquisitions contributed 8%.
Weaker Euro had a negative impact of 3%.
Actuant's acquisition pipeline is robust and given its strong
balance sheet, it is well positioned to invest in growth
opportunities and also fund share buybacks. However, uncertainty in
Europe remains a headwind. We currently have a Zacks #3 Rank
(short-term Hold recommendation) on the stock.
Headquartered in Menomonee Falls, Wisconsin, Actuant Corporation
designs, manufactures, and distributes industrial products and
systems worldwide. It operates through four segments: Industrial,
Energy, Electrical and Engineered Solutions. It competes with
Parker Hannifin Corporation
ACTUANT CORP (ATU): Free Stock Analysis Report
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