Core-Mark Holding Company Inc.
) recently posted third quarter 2012 adjusted earnings of $1.01
per share, which were again below the Zacks Consensus Estimate of
$1.20. The reported earnings also lagged the year-ago earnings of
$1.14 per share.
The company reported net sales of $2.31 billion for the quarter,
up 4.0% year over year. The increase in revenue was mainly
attributable to the strong presence of the company in the
southeast U.S., driven by the Couche-Tard contract in the third
quarter of 2011, partially offset by one less day of business in
this quarter and a 5.3% slip in comparable cigarette carton
Sales at the Cigarette category crept up 2.0% to $1.6 billion
with carton volume being flat. However, excluding the
contribution from the new business in the Southeastern U.S.,
impact of one less selling day and a fall in comparable cigarette
carton sales, cigarette sales plunged 5%.
Sales at the Non-cigarette category climbed 9.1% to $718.4
million on the back of same-store sales growth of 4% and
During the quarter, adjusted gross profit expanded 3.9% to $125.8
million, attributed to an increase of 6.1% in non-cigarette gross
Total operating expenses climbed 3.9% to $105.0 million due to
higher warehousing and distribution expenses. However, as a
percentage of net sales, total operating expenses were flat year
Adjusted EBITDA plunged 13.0% to $28.7 million in the reported
The company lowered its earnings outlook for 2012 from its
previous expectation range of $2.75 to $2.90 to $2.75 to $2.85.
However, it continues to expect net sales of $9.0 billion for
2012, up 11.0% year over year, owing to the benefits from the
FCGC acquisition, new contract wins, market expansion and vendor
consolidation initiatives. The company expects capital
expenditure to be approximately $30 million.
The company, which distributes packaged consumer products to the
retail industry, reported lower-than-expected third quarter 2012
results and also trimmed its earnings guidance. Hence, we expect
estimates to go down in the coming days. The Zacks Consensus
Estimates for 2012 and 2013 are pegged at $2.80 and $3.90,
As a result, we also have a Zacks #4 Rank on the stock, implying
a Sell rating over the short term. We also reiterate our
long-term Underperform recommendation on the stock. However, one
of its peers
Farmer Brothers Co.
) currently has a Zacks #2 Rank, implying a Buy rating over the
CORE-MARK HLDG (CORE): Free Stock Analysis
FARMER BROS CO (FARM): Free Stock Analysis
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