Luxfer's Q2 Earnings Lag Estimates, Acquires U.S. Firms - Analyst Blog


Luxfer Holdings PLC ( LXFR ) reported weaker-than-expected results for second-quarter 2014. Adjusted earnings came in at 27 cents per American Depositary Shares (ADS), down 25% from 36 cents reported in the year-ago quarter. Also, the bottom-line result fell short of the Zacks Consensus Estimate of 28 cents per ADS .


Luxfer's total revenues of $121.9 million inched down 0.9% year over year. The decline was primarily due to weak results in the Elektron division. However, the top-line result surpassed the Zacks Consensus Estimate of $120 million.

Details of the segmental performance are provided below:

Revenues from the Gas Cylinders division were roughly $65.9 million, up 1.7% year over year and representing 54.1% of total revenue. The Elektron division generated revenues of $56.0 million, down 3.8% and accounting for 45.96% of total revenue.


Cost of sales climbed 2.3% year over year, representing 77.6% of total revenue versus 75.2% in the year-ago quarter. Distribution and administrative costs, as percentages of total revenue, came in at 1.8% and 11.2%, respectively.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $16.2 million versus $19.8 million recorded in the year-ago quarter.

Balance Sheet/ Cash Flow

Exiting second-quarter 2014, Luxfer had cash and short-term deposits of $11.1 million, down 40% from $18.5 million in the preceding quarter. Bank and other loans stood at $66.5 million, up 4.2% sequentially.

Luxfer used cash of $4.7 million for its operating activities, as against cash generation of $6.9 million in the year-ago quarter. Capital expenditure expanded 20% year over year to $4.8 million. Dividend distributed amounted to $2.7 million.

Concurrent with the earnings release, Luxfer announced the successful acquisition of two U.S.-based private companies, Truetech Inc. and Innotech Products Ltd. Acquired for $64 million, these will be integrated with Luxfer's wholly owned subsidiary, Luxfer Magtech Inc.  

With a market capitalization of $513 million, Luxfer Holdings currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the machinery industry include Blount International Inc. ( BLT ), The Babcock & Wilcox Company ( BWC ) and Dover Corporation ( DOV ). While Blount International sports a Zacks Rank #1 (Strong Buy), both The Babcock & Wilcox and Dover Corporation 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: ADS , DOV , BWC , LXFR , BLT

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