Colfax Beats Earnings, Rev Lags in 1Q13 - Analyst Blog
26 April 2013 - 3:10PM
Zacks
Colfax Corporation
(CFX), a manufacturing and engineering company recently announced
its results for the first quarter of 2013. Adjusted earnings per
share in the quarter were recorded at 26 cents, beating the Zacks
Consensus Estimate of 24 cents by 8.33%. Moreover, earnings
increased 13.0% year over year, due to improved sales and margins
in the quarter.
Revenue: Colfax’s
revenue in the first quarter was recorded at $947.1 million, which
lagged the Zacks Consensus Estimate of $955.0 million by 0.8%.
Revenue increased 6.8% year over year, due to about $105.2 million
contribution from various acquisitions, which was slightly offset
by a drop in the existing business accompanied by foreign currency
adjustments.
Total orders in the quarter were
$502.1 million, increasing 0.9% year over year, whereas total
backlog at the end of the quarter stood at $1,443.4 million,
compared with $1,372.8 million at the end of first quarter
2012.
Revenue from the Gas and
Fluid Handling segment came in at $425.1 million, slightly
below the year-ago revenue of $425.3 million. However, the
Fabrication Technology segment grew 13.2% year
over year to $522.0 million, which was essentially inorganic
growth.
Costs/Margins:
Colfax’s gross profit margin in the quarter was 30.7% in the
quarter, increasing 340 basis points year over year, due to active
cost control measures pursued by the company. SG&A as a
percentage of sales was 22.4%, against 23.9% in the first quarter
of 2012. Colfax’s adjusted operating income margin expanded 120
basis points year over year in the quarter to 8.1%.
Gas and Fluid Handling segment’s
gross margin was recorded at 29.9% in the quarter, against 29.0% in
the first quarter of 2012. Fabrication Technology’s gross margin
increased 570 basis points in the quarter to 31.4%.
Balance Sheet/ Cash
Flow: Exiting the first quarter of 2013, Colfax’s cash and
cash equivalents stood at $234.8 million, against $482.4 million in
the fourth quarter of 2012. Long-term debt for the quarter was $1.4
billion, compared with $1.7 billion in the preceding quarter.
Cash used in operating activities
was $13.4 million, decreasing from the $109.3 million used in the
first quarter of 2012. Colfax bought fixed assets worth $18.0
million in the quarter against a purchase of $18.9 million in the
year-ago quarter.
Outlook: Colfax
reaffirmed its revenue guidance in the range of $4.175 billion to
$4.25 billion with an organic revenue increase of 1% to 3%.
Moreover, operating margin is expected to be around 10.0% for 2013.
The company is expected to witness a hike of 27.0% to 42.0% in its
earnings per share for 2013 over 2012, and lie in the range of
$1.70 to $1.90.
Our
Recommendation: Colfax currently holds a Zacks Rank #3
(Hold). Other general industrial stocks to look out for are
The Babcock & Wilcox Company (BWC),
EnPro Industries, Inc. (NPO) and Tri-Tech
Holding, Inc. (TRIT); each carrying a Zacks Rank #1
(Strong Buy).
BABCOCK&WILCOX (BWC): Free Stock Analysis Report
COLFAX CORP (CFX): Free Stock Analysis Report
ENPRO INDUS INC (NPO): Free Stock Analysis Report
TRI-TECH HOLDNG (TRIT): Free Stock Analysis Report
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