Actuant (ATU) Beats on Q1 Earnings and Revenue Estimates

Actuant Corporation ATU recently reported better-than-expected results for first-quarter fiscal 2018 (ended Nov 30, 2017).

Earnings and Revenues

Quarterly adjusted earnings came in at 19 cents per share, beating the Zacks Consensus Estimate by a penny. However, the figure came in a penny lower than the year-ago tally of 20 cents per share.

Net sales during the reported quarter came in at $289 million, outpacing the Zacks Consensus Estimate of $269 million. The top line also exceeded the prior-year tally of $265.8 million.

Core sales improved 6% year over year in the fiscal second quarter backed by solid volumes secured from the Engineered Solutions and Industrial segments.

Segmental Details

Revenues in the Industrial segment were up 11% year over year to $96.9 million. The upside primarily stemmed from sturdy sales of standard industrial tools across all end markets.

Net sales of the Engineered Solutions segment jumped 23.7% year over year to $116.2 million. Elevated sales secured from major end markets (like agriculture and heavy-duty truck markets) supported the year-over-year growth.

However, the Energy segment revenues dipped 10.4% to $75.8 million in the reported quarter. The downside resulted due to disappointing Hydratight and Viking business sales.

Costs and Margins

Cost of products sold in the reported quarter came in at $188 million, higher than $172.7 million recorded in the year-ago quarter. Gross profit margin in the fiscal second quarter came in at 34.9%, contracting 10 basis points (bps) year over year.

Selling, administrative and engineering expenses totaled $74.4 million, higher than $68.6 million incurred in the comparable quarter last fiscal. Quarterly operating margin expanded 20 bps to 7.4%.

Balance Sheet and Cash Flow

Exiting the fiscal second quarter, Actuant had cash and cash equivalents worth $165.1 million, lower than $229.6 million recorded at the end of fiscal 2017. Long-term debt totaled $524.6 million, down from $531.9 million recorded on Aug 31, 2017.

In the quarter under review, Actuant used cash worth $20.5 million from operating activities, as against $12.5 million cash provided in the year-ago period. Capital expenditure came in at $7.9 million compared to $5.1 million registered in the year-earlier quarter.

Outlook

Actuant stated that it has successfully accomplished its portfolio management efforts, in order to limit the company’s services in the offshore upstream energy market.

This Zacks Rank #2 (Buy) stock anticipates to report revenues in the range of $265-$275 million and earnings within 10-15 cents in second-quarter fiscal 2018.

However, Actuant reaffirmed its revenue and earnings guidance for fiscal 2018. Revenues for fiscal 2018 are projected to lie in the band of $1.10-$1.13 billion (estimating 1-3% rise in core sales). Adjusted earnings for fiscal 2018 are estimated to be in the range of $1.05-$1.15 per share.

Actuant also noted that it has adequate capital to finance several organic and inorganic growth programs in the near future.

Other Stocks to Consider

Some other top-ranked stocks in the industry are listed below:

ABB Ltd ABB currently carries a Zacks Rank of 2. The company has pulled off an average earnings surprise of 11.67% in the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Acco Brands Corporation ACCO has a Zacks Rank of 2. The company generated an average positive earnings surprise of 81.89% over the trailing four quarters.

Altra Industrial Motion Corp. AIMC also holds a Zacks Rank of 2. The company recorded an average positive earnings surprise of 17.30% during the same time period.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.

Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.