EnPro Stumbles on 1Q13 Earnings - Analyst Blog
03 Mai 2013 - 2:50PM
Zacks
Machinery company, EnPro
Industries, Inc. (NPO) posted dismal results for the first
quarter 2013, ended Mar 31, 2013. EnPro posted adjusted earnings
per share of 39 cents, plunging 39.1% year over year. Earnings also
missed the Zacks Consensus Estimate of 73 cents by 46.6%, resulting
from lower revenues in the quarter.
Revenue: EnPro’s
revenue in the reported quarter was $286.9 million, compared with
$311.5 million in the first quarter of 2012. Revenue missed the
Zacks Consensus Estimate of $292.0 million by 1.7%. The decline in
revenue was due to demand reduction in EnPro’s industrial markets
as well as lower selling prices of new engines.
Costs/Margins:
Gross margin for the reported quarter dropped 158 basis points year
over year to 32.8%. SG&A expenses were recorded at $72.6
million, against $73.5 million recorded in the year-ago quarter.
Adjusted EBITDA fell to 12.6%, declining 230 basis points year over
year.
Segment Details:
Sealing Products recorded revenue of $146.6
million, compared with $149.5 million in the first quarter of 2012.
Operating margin for the segment was recorded at 14.5%, decreasing
60 basis points year over year.
Revenue from
Engineered Products was $91.8
million, against $100.6 million in the year-ago quarter. Segment’s
operating margin stood at 6.3%, 260 basis points down from the
quarter ended Mar 31, 2012.
Engine Products and
Services generated revenue of $49.4 million, while the
revenue generation in the year-ago quarter was $62.0 million.
Operating margin for the segment was 9.7%, against 19.0% in the
year-ago quarter.
Balance Sheet/Cash
Flow: Exiting the first quarter of 2013, EnPro’s cash and
cash equivalents stood at $48.5 million, decreasing $5.4 million
sequentially. Long-term debt for the company was recorded at $57.1
million, against $184.3 million recorded in the preceding
quarter.
Cash flow used in operating
activities in the quarter was $17.8 million, against a cash
generation of $3.4 million in the year-ago quarter. Capital
expenditure incurred in the quarter was $9.8 million, compared with
$5.5 million in the first quarter of 2012.
Outlook: Based on
seasonality, management expects revenue generation in the second
quarter of 2013 to improve sequentially. This, coupled with the
cost saving initiatives undertaken by the company, is believed to
increase the profits and margins of EnPro.
EnPro currently carries a Zacks
Rank #1 (Strong Buy). Other stocks worth a look in the industry are
Graco Inc. (GGG), Omnitek Engineering
Corp. (OMTK) and Tri-Tech Holding, Inc.
(TRIT); each carrying a Zacks Rank #1 (Strong Buy).
GRACO INC (GGG): Free Stock Analysis Report
ENPRO INDUS INC (NPO): Free Stock Analysis Report
OMNITEK ENGINRG (OMTK): Get Free Report
TRI-TECH HOLDNG (TRIT): Free Stock Analysis Report
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