Precision Castparts Corp
) reported its fourth-quarter fiscal 2014 results with net income
from operations of $479 million, which increased 15.4% from $415
million in the prior-year quarter.
The reported earnings from continuing operations (excluding one
time items) of $3.27 per share, beat the Zacks Consensus Estimate
of $3.21 by 1.9%. However, year-over-year quarterly earnings were
up 16.0% from $2.82 per share in the year-ago quarter.
Revenues increased 3.9% year over year to $2.5 billion from $2.4
billion in the prior-year quarter, primarily driven by organic
growth of 3%. The company reported strong revenue growth in two of
its three operating segments, which also contributed to the
top-line improvement. Revenues were in line with the Zacks
Consensus Estimate of $2.5 billion.
Investment Cast Products
revenues declined marginally by 0.9% to $629 million from $635
million in the year-ago quarter. The marginal decline includes an
approximately $5 million decrease in contractual material
pass-through pricing. Large commercial aerospace sales increased
approximately 8%, driven by strong production schedules, with
reduced military and regional/business jet shipments tempering
overall segment sales. This was partially offset by a
year-over-year decrease in OEM industrial gas turbine (IGT)
production, while the segment's power business continued to see
strong demand, driven by upgrade programs, share gains and spares
revenues also inched up 0.2% year over year to $1,120 million from
$1,118 million in the prior-year quarter. Fourth quarter revenues
included a year-over-year decline in alloy and revert selling
prices of approximately $69 million. Large commercial aerospace
sales rose approximately 5% year over year, offset by lower
military sales while the business jet sales were flat. IGT sales
grew about 5%, while interconnect pipe sales increased 28% year
over year. The revenues from the Oil & gas shipments segments
dropped by 12% in the fourth quarter.
revenues surged 15% year over year to $781 million, compared with
$681 million in the year-ago quarter. Aerospace sales increased 17%
year over year, including 5% organic growth. Demand for the
segment's Fastener 787 products has been strong, with an average of
eight ship sets per month.
Consolidated segment operating income improved 15% year over
year, to $720 million or 28.5% of sales, compared with $626
million, or 25.7% of sales, in the preceding year. Gross margins
during the quarter contracted 285 basis points (bps) year over year
to 65.0%, while operating margin increased 289 bps to 27.9% driven
by strong synergies from acquisitions.
Exiting the quarter, Precision Castparts had a cash balance of
$361 million, up 28.9% from $280 million as on Mar 31, 2013.
As on Mar 31, 2014, Precision Castparts had a total debt of $3.6
billion versus $3.8 billion as on Mar 31, 2013. Despite major
acquisitions, the company has managed its debt well. Total capital
expenditure incurred by the company in the quarter aggregated $94
Precision Castparts currently has a Zacks Rank #3 (Hold). Some
better-ranked stocks in the sector include
CIRCOR International, Inc
). All three of the stocks hold a Zacks Rank #2 (Buy).
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