Blount Downgraded to Strong Sell - Analyst Blog

By
A A A

Zacks Investment Research downgraded Blount International Inc. ( BLT ) to a Zacks Rank #5 (Strong Sell) on Jan 2, 2014.

Why the Downgrade?

Blount International's results for third-quarter 2013, announced on Nov 1, 2013, were disappointing. Earnings per share came in at 21 cents, down 8.7% year over year. However, the result was 5% above the Zacks Consensus Estimate of 20 cents.

Sales came in at $230.6 million, down 1% over the year-ago quarter, due primarily to weak performance at the Forestry, Lawn and Garden segment, offset partially by healthy performance in the Farm, Ranch and Agriculture segment.

With respect to costs/margins of Blount International, cost of sales in the quarter rose 1.0% year over year leading to roughly a 10 basis point decline in gross profit margin. Income tax expenses were a drag on the results as it skyrocketed roughly 266.9%.

For 2013, foreign currency headwind is expected to range within $1-$2 million; interest expense is predicted to be within $18-$19 million and tax rate to be within the 32%-35% range. Sales are expected to range within $905-$915 million, down 1.9% year over year, at the mid points. Forestry, Lawn and Garden sales are expected to be down 4%-5%, offset by an increase of 6%-7% anticipated in Farm, Ranch, and Agriculture segments' sales.

In the last 60 days, the Zacks Consensus Estimate for Blount International decreased 5.7% to 99 cents for 2014. This, along with negative average earnings surprise of 13.7% for the trailing quarters, raises concern over the company's performance in the quarters ahead.

Other Stocks to Consider

Blount International is a $714 million company manufacturing and marketing tools for forestry, lawn and garden, farm, ranch, agriculture and construction sectors.

Some better-ranked stocks in the machinery industry include Barnes Group Inc. ( B ), Middleby Corp. ( MIDD ) and Altra Industrial Motion Corp. ( AIMC ). While Barnes Group carries a Zacks Rank #1 (Strong Buy), Middleby and Altra Industrial carry a Zacks Rank #2 (Buy).



ALTRA HOLDINGS (AIMC): Free Stock Analysis Report

BARNES GRP (B): Free Stock Analysis Report

BLOUNT INTL (BLT): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AIMC , B , BLT , MIDD

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

64,789,752
  • $117.60 ▼ 0.86%
53,107,118
  • $10.39 ▼ 1.05%
42,226,525
  • $17.10 ▼ 0.47%
36,917,582
  • $11.02 ▼ 0.36%
34,902,121
  • $40.75 ▼ 0.10%
31,489,742
  • $15.68 ▲ 0.06%
31,037,743
  • $75.63 ▲ 2.19%
29,605,187
  • $10.11 ▼ 0.69%
As of 11/25/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com