EnPro Industries Inc. NPO recently announced that it will record a $6.2 million provision for loss related to adverse foreign currency movements in first-quarter 2015. The news weakened market sentiments on the stock, resulting in a 3.83% fall in the share price since Apr 20.
As disclosed, the loss provision pertains to the Euro-denominated engine contract, Fairbanks Morse Engine. The contract, worth €89.2 million, was awarded to EnPro Industries by Electricite de France in May 2014.
In addition, EnPro Industries revealed that operating income, excluding the forex-related loss, will be approximately $17.6 million in first-quarter 2015. Including the loss, operating income will come down to $11.4 million. The company’s Power Systems segment is expected to report profits of $6.8 million (or $0.6 million including the loss provision).
For 2015, EnPro Industries expects healthy original equipment manufacturer (“OEM”) order in the semiconductor, aerospace and trucking industries; while predicting that customers in automotive and general industrial markets will benefit from lower gasoline prices. However, the company anticipates that difficult operating conditions in some foreign countries might impact the demand for its products. Also, foreign currency translation remains a major headwind.
EnPro Industries is scheduled to release first-quarter 2015 results on Apr 30, 2015 before the market opens. The Zacks Consensus Estimate for the quarter is pegged at 44 cents per share, while those for 2015 and 2016 stand at $2.23 and $2.62, respectively.
With a market capitalization of $1.6 billion, EnPro Industries currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include RBC Bearings Inc. ROLL, AO Smith Corp. AOS and Sandvik AB SDVKY. While RBC Bearings sports a Zacks Rank #1 (Strong Buy), both AO Smith and Sandvik carry a Zacks Rank #2 (Buy).
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