Zacks Investment Research downgraded
Chart Industries Inc.
) to a Zacks Rank #5 (Strong Sell) on Nov 13, 2013.
Why the Downgrade?
Shares of Chart Industries have fallen roughly 11% since the
company reported its financial results for the third quarter of
2013 on Oct 31. The company's earnings per share of 82 cents were
8.9% below the Zacks Consensus Estimate of 90 cents. However,
compared with the year-ago quarter, results reflected an
improvement of 24%.
Revenue in the quarter increased 18.7% year over year as revenue
fall in Energy & Chemicals segments were more than offset by
healthy performances at Distribution & Storage as well as
BioMedical segments. Orders in the quarter were roughly flat
compared with the year-ago period. Gross margin in the quarter
fell 130 basis points as cost of sales represented a higher
percentage of revenue in the quarter. Roughly 21% increase was
recorded in cost of sales. Selling, general and administrative
expenses increased 13.7% year over year.
For 2013, management of Chart Industries has revised down its
revenue and earnings guidance. Sales are now anticipated to be
within $1.175-$1.225 billion range versus $1.2-$1.3 billion range
expected earlier, while earnings per share are expected to be
within $2.90-$3.00 versus $3.10-$3.40 expected earlier.
Weak order pattern along with lowered guidance for 2013 has led
to downward revision in earnings estimates in the last 30 days
for Chart Industries. The Zacks Consensus Estimate has gone down
by 8.4% to $2.95 for 2013 and has declined 7.5% to $4.06 for
Also, Chart Industries had negative earnings surprise in two out
of four trailing quarters, with the average being a negative
7.3%. We currently have an
of -8.9% for the fourth quarter of 2013 and -2.2% for 2014.
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Other Stocks to Consider
Chart Industries is a $2.93 billion company, operating in the
metal fabrication industry. Other stocks to watch out for in the
) with Zacks Rank #1 (Strong Buy).
), where each come with a Zacks Rank #2 (Buy).