EnPro Downgraded to Strong Sell - Analyst Blog

By
A A A

On March 25, Zacks Investment Research downgraded EnPro Industries, Inc. ( NPO ) to a Zacks Rank #5 (Strong Sell) owing to disappointing results for the fourth quarter of 2013.

Why the Downgrade?

In the fourth quarter of 2013, EnPro's adjusted earnings per share of 46 cents dropped 22% year over year, while revenues declined to $275.5 million from $279.3 million in the year-ago quarter. The year-over-year decrease in revenues was due to a reduction in the parts and service demand along with lower engine revenues in the company's Engine Products and Services segment.


The company also recorded a year-over-year decline of 150 basis points in the gross margins to 31.1%. Adjusted earnings before interest, income taxes, depreciation and amortization for the reported quarter were $34.2 million versus $38.2 million in the year-ago quarter.

Exiting the fourth quarter of 2013, EnPro also recorded a sequential decline in cash and cash equivalents to $64.4 million. In 2013, cash generation from operations declined to $61.7 million from $118.2 million in 2012. Moreover, in the coming quarters, demand in the Engine Products and Services is expected to remain low.

Following the results, the Zacks Consensus Estimate for earnings per share decreased 9.6% to $2.44 for 2014, while the same for 2015 declined 3.3% to $2.95 over the past 60 days.

EnPro Industries is a leader in sealing products, metal polymer bearings, compressor systems and other engineered products for use in critical applications by industries worldwide.

Other Stocks to Consider

EnPro currently has a market capitalization of $1.5 billion. Some better-ranked stocks in the industry include Kadant Inc. ( KAI ), The Middleby Corp. ( MIDD ) and Xylem Inc. ( XYL ). While Kadant sports a Zacks Rank #1 (Strong Buy), Middleby and Xylem hold a Zacks Rank #2 (Buy).



KADANT INC (KAI): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

ENPRO INDUS INC (NPO): Free Stock Analysis Report

XYLEM INC (XYL): 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: KAI , MIDD , NPO , XYL

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

89,070,840
  • $17.26 ▲ 3.23%
78,931,485
  • $7.02 ▲ 4.46%
77,555,734
  • $6.70 ▲ 6.69%
77,025,346
  • $24.66 ▲ 0.69%
74,713,335
  • $101.80 ▲ 1.82%
72,324,726
  • $7.64 ▲ 0.79%
57,112,188
  • $17.84 ▲ 55.27%
53,321,397
  • $18.01 ▼ 4.46%
As of 12/17/2014, 04:15 PM


Find a Credit Card

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