Colfax Q4 Earnings In Line With Ests - Analyst Blog


Manufacturing and engineering company, Colfax Corporation ( CFX ) reported adjusted earnings per share of 59 cents in the fourth quarter of 2013, reflecting an increase of 45.2% year over year.

Adjusted earnings per share of 61 cents, however, included a gain of 2 cents related to certain tax matters. Excluding this one-time gain, earnings per share in the quarter were 59 cents, in line with the Zacks Consensus Estimate.

For 2013, Colfax reported adjusted earnings per share of $2.04, up compared with $1.34 recorded in the year-ago quarter.


Net sales generated in the fourth-quarter 2013 were $1,171.4 million, up 14.0% year over year and ahead of the Zacks Consensus Estimate of $1,087 million. The increase can be attributed to the 10.2% gain from existing businesses and 6.5% contribution from acquisitions, partially offset by a 2.7% negative impact of foreign currency translation.

Total orders in the quarter were $547.8 million, up 5.3% year over year while backlog at the end of the quarter was $1,577.4 million, compared with $1,431.5 million at the end of fourth-quarter 2012.

Colfax generates revenue under two heads, which are briefly discussed below:

Revenue from the Gas and Fluid Handling segment came in at $511.4 million, up 10.0% year over year. Fabrication Technology revenue grew 2.8% year over year to $503.2 million.

In 2013, Colfax generated net sales of $4,207.2 million, reflecting an increase of 7.5% year over year. The top-line result also surpassed the Zacks Consensus Estimate of $4,123.0 million.


Colfax recorded 13.1% year-over-year increase in cost of goods sold, which as a percentage of revenue was at 69.5%, down 60 basis points year over year. Gross margin in the quarter was 30.5%. Selling, general and administrative (SG&A) expenses, as a percentage of revenue, were 18.7%, against 22.8% in the year-ago quarter.

Adjusted operating income margin expanded 190 basis points year over year to 10.6% in the quarter.

Balance Sheet/ Cash Flow

Exiting the fourth quarter of 2013, Colfax's cash and cash equivalents were at $311.3 million, roughly half of $639.3 million recorded in the preceding quarter. Long-term debt was at $1.5 billion versus $1.4 billion in the previous quarter.

Colfax generated $362.2 million cash flow from operating activities in 2013, versus $174.0 million generated in 2012. Capital spent on purchase of fixed assets was $71.5 million, down from $83.2 million in 2012.


Colfax maintained its 2014 guidance provided earlier in Dec 2013. It anticipates organic revenue growth within a range of 1-3%; including 2-4% growth in Fluid Handling, 4-6% growth in Howden and (1%)-2% growth in Fabrication Technology. Total revenue is anticipated to be within the $4.5-$4.625 billion range.

Adjusted earnings per share are estimated within the $2.40-$2.65 range, excluding 43 cents from restructuring costs and 6 cents from tax adjustments. (GAAP) earnings per share are anticipated to be within $2.14-$2.34 range.

Colfax currently has a market capitalization of $6.1 billion and currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry, with a Zacks Rank #2 (Buy) are Middleby Corp. ( MIDD ), Altra Industrial Motion Corp. ( AIMC ) and Barnes Group Inc. ( B ).

ALTRA HOLDINGS (AIMC): Free Stock Analysis Report

BARNES GRP (B): Free Stock Analysis Report

COLFAX CORP (CFX): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

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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, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AIMC , B , CFX , MIDD

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