Luxfer Misses on Q3 Earnings & Revenues - Analyst Blog

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Luxfer Holdings PLC ( LXFR ) reported disappointing third-quarter 2013 financial results as its adjusted net income in the quarter declined 7.9% year over year to $9.3 million. Adjusted earnings per American Depositary Share (ADS) in the quarter were 33 cents, missing the Zacks Consensus Estimate of 35 cents by 5.7%.

Revenues

Revenues for Luxfer Group increased 4.7% year over year to $119.9 million. Results were boosted by a rise in sales of alternative fuel cylinders and an improved market for life-support cylinders in the U.S. Revenues missed the Zacks Consensus Estimate of $123.0 million.

The Gas Cylinders Division generated roughly $64.3 million in revenues, up 11.8% year over year, on the back of improved sales in composite alternative fuel cylinders and composite life-support cylinders. The Elektron Division 's revenues amounted to $55.6 million, down 2.5% year over year, due to a weaker-than-expected automotive demand in the European regions.

Costs/Margins

Cost of sales in the third quarter rose 7.1% year over year and represented 75.8% of total revenue, an increase from 74.1% reported in the year-ago quarter. Distribution and administrative costs, as a percentage of total revenue, stood at 1.3% and 11.2%, respectively.

Adjusted earnings before interest, taxes, depreciation and amortization margin in the quarter was 15.3%, decreasing 210 basis points, year over year.

Balance Sheet

Exiting third-quarter 2013, Luxfer's cash and short-term deposits balance stood at $38.1 million, against $37.0 million in the previous quarter. Bank and other loans at the quarter-end stood at $63.7 million, flat versus the prior quarter.

Cash Flow

Net cash flow from operating activities in the quarter was $13.3 million, compared with $6.8 million in the year-earlier quarter. Capital expenditure was recorded at $6.2 million versus $4.4 million in the year-ago quarter.

Guidance

Management believes that the European markets will have a negative impact on fourth-quarter earnings, whereas the North American markets are strong barring the defense segment. Additionally, the Gas Cylinder business is performing well and this trend is expected to continue in the quarters to come. For 2013, management anticipates trading profit to be at the lower end of the previously announced $60.5 million-$63.5 million range. Moreover, earnings per ADS are expected in the range of $1.40 to $1.43 in 2013.

Other Stocks to Consider

Luxfer currently carries a Zacks Rank #3 (Hold). Other stocks worth a watch in the industry include Xylem Inc. ( XYL ), Graham Corp. ( GHM ) and DXP Enterprises, Inc. ( DXPE ). While Xylem carries a Zacks Rank #1 (Strong Buy), Graham and DXP Enterprises both hold a Zacks Rank #2 (Buy).



DXP ENTERPRISES (DXPE): Free Stock Analysis Report

GRAHAM CORP (GHM): Free Stock Analysis Report

LUXFER HOLDINGS (LXFR): Free Stock Analysis Report

XYLEM INC (XYL): Free Stock Analysis Report

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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: ADS , DXPE , GHM , LXFR , XYL

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