Hillenbrand Posts Solid Q3 Earnings, Maintains FY14 Outlook - Analyst Blog

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Hillenbrand, Inc. ( HI ) reported adjusted earnings of 57 cents per share for third-quarter fiscal 2014 (ended Jun 2014). The bottom-line grew 18.8% from 48 cents earned in the year-ago quarter.

Revenues

Hillenbrand generated net revenues of $416.8 million, up 2.0% year over year, primarily driven by improved revenues from the Process Equipment Group.

The company's segmental results are discussed below:

Revenues from the Process Equipment Group were $274 million, reflecting a year-over-year increase of 5%, or 2% on a constant currency basis. Order backlog was $731 million versus $572 million at the end of the year-ago quarter.

Batesville segment's revenues declined 4%, or 3% on a constant currency basis, to $143 million. Lower number of burials in North America adversely impacted selling price and volumes.

Margins

Hillenbrand's cost of sales was relatively flat at $267.6 million and, as a percentage of revenue, was 64.2% versus 65.4% in the prior-year quarter. Gross margin climbed 120 basis points (bps) to 35.8%. Operating expenses, as a percentage of revenue, were 22.3%, down from 22.4% in the year-ago quarter.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $71 million, up 11% year over year. EBITDA margin came in at 17.0%.

Balance Sheet/ Cash Flow

Exiting third-quarter fiscal 2014, Hillenbrand had cash and cash equivalents of $61.7 million versus $51 million in the preceding quarter.

In the nine months ended Jun 2014, Hillenbrand generated cash of $136.9 million from its operating activities as against $50.8 million produced in the year-ago comparable period.

Outlook

For fiscal 2014, Hillenbrand maintained its revenue guidance at approximately $1.7 billion, including contributions of $1.1 billion from the Process Equipment Group and roughly $600 million from the Batesville segment. Top-line result is expected to gain 1% from favourable currency translation impacts. Adjusted earnings are anticipated in a range of $2.00−$2.10 per share.

With a market capitalization of $1.9 billion, Hillenbrand currently carries a Zacks Rank #3 (Hold). Better-ranked companies in the industry include Ingersoll-Rand Plc ( IR ), Badger Meter Inc. ( BMI ) and Roper Industries Inc. ( ROP ). All these stocks hold a Zacks Rank #2 (Buy).


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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 , Earnings , Stocks

Referenced Stocks: ROP , BMI , IR , HI

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