) reported stellar first quarter 2013 results with earnings of
$52.1 million or 84 cents per share comparing with $35.4 million
or 58 cents per share in the year-ago quarter. The year-over-year
increase in earnings was primarily attributable to the accretive
acquisition of the Gema Powder Finishing business and superior
growth in the contractor business in the Americas. The earnings
in the reported quarter were well ahead of the Zacks Consensus
Estimate of 73 cents.
Net sales for first quarter 2013 came in at $269.0 million, up
15.0% year over year but missed the Zacks Consensus Estimate of
$271 million. Quarterly sales increased 26% in Europe Middle East
and Africa (EMEA), 10% in the Americas and 16% in Asia Pacific.
Gross margin came in at 56%, down 1.5 percentage points from the
year-ago quarter, driven by lower margins from acquired Powder
Finishing operations, partially offset by price increases and
manufacturing cost improvements.
The Industrial segment witnessed a 22% rise in sales to $164.2
million, driven by the Powder Finishing operations. On a
geographic region basis, sales increased 3% in the Asia Pacific
while decreased 8% in EMEA.
Net sales in the Contractor segment increased 8% year over year
to $77.6 million, largely due to the strong performance in the
During the reported quarter, the Lubrication segment recorded a
3% decline in net sales to $27.2 million as sales increases in
the Americas and EMEA were offset by decrease in Asia Pacific
with weak demand in the mining sector.
Balance Sheet and Cash Flow
Cash and cash equivalents at Mar 29, 2013 were $36.9 million
versus $31.1 million as of Dec 28, 2012. Long-term debt decreased
to $520.9 million in Mar 29, 2013 from $556.5 million at year-end
2012. At Mar 31, 2013, net cash provided by operating activities
surged to $39.2 million from $23.5 million in the prior-year
For full-year 2013, management anticipates growth across all
geographic regions. In the Americas, the company expects to
benefit from the continued recovery in its Contractor and
Industrial segments. Despite the prevailing macroeconomic
conditions in Western Europe and Asia Pacific, Graco expects its
new product developments, sales initiatives and expansions to
drive modest growth in EMEA and Asia Pacific in 2013.
Graco currently has a Zacks Rank #2 (Buy). Other stocks that
look promising and are worth considering now are
The Babcock & Wilcox Company
EnPro Industries, Inc.
Tri-Tech Holding, Inc
), each carrying a Zacks Rank #1 (Strong Buy).
BABCOCK&WILCOX (BWC): Free Stock Analysis
GRACO INC (GGG): Free Stock Analysis Report
ENPRO INDUS INC (NPO): Free Stock Analysis
TRI-TECH HOLDNG (TRIT): Free Stock Analysis
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