Earnings Highlights and Review: Argan’s Revenue Rocketed 77%; Net Income Surged 69%

Research Desk Line-up: Layne Christensen Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 27, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Argan, Inc. (NYSE: AGX), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=AGX, following the Company’s announcement of its first quarter fiscal 2017 earnings results on June 07, 2017. The power industry service provider reported its eighth consecutive quarter of revenue growth. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Heavy Construction industry. Pro-TD has currently selected Layne Christensen Company (NASDAQ: LAYN) for due-diligence and potential coverage as the Company announced on June 08, 2017, its financial and operating results for Q1 FY18 which ended on April 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Layne Christensen when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on AGX; also brushing on LAYN. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For the first three months ended April 30, 2017, Argan’s sales increased 76.8% to $230.49 million from $130.35 million in Q1 2016. The increase was attributable to Gemma Power Systems (GPS) which ramped up construction activities on four large, natural gas-fired power plants. Approximately 91% of its consolidated revenue comes from power industry services segment. The Company’s revenue number topped analysts’ estimates of $183.10 million.

During Q1 2017, Argan’s gross margin was 17.4% of sales, down 4.3% from Q1 2016. The decrease in gross margin was in spite of an increase in gross profit which stood at $40.10 million, an increase of 42% from $28.30 million in Q1 2016. This decrease in gross margin can be reflected in the changes in the mix and progress of various power plant projects and the differences in their respective gross margins.

Argan’s Q1 2017 selling, general, and administrative (SG&A) expenses increased $2.4 million to $9.5 million compared to $7.05 million in Q1 2016, primarily due to increased incentive and stock option compensation and human capital costs reflective of larger operations, but decreased as a percentage of revenue to 4.1% from 5.4% in the prior year’s same quarter. The Company’s other income from short-term investments increased $1.2 million on a y-o-y basis due to higher yields and investment balances.

Argan’s EBITDA attributable to the stockholders for the quarter ended April 30, 2017, also increased 61% to $32.5 million, or $2.06 per diluted share, from $20.2 million, or $1.34 per diluted share, in Q1 2016.

For Q1 2017, Argan’s net income was $20.63 million up by 69% compared to $12.2 million in Q1 2016. On per share basis, the Company reported earnings of $1.31 per diluted share compared to $0.81 per diluted share in the prior year’s same quarter. The Company’s earnings numbers surpassed Wall Street’s expectations of $0.89 per share.

Commenting on Argan’s results, Rainer Bosselmann, Chairman and Chief Executive Officer, stated:

“This represents the eighth consecutive quarter of increasing revenues, [the] fourth consecutive quarter with over $18 million in net income for our shareholders and fifth consecutive quarter of increasing net liquidity which stands at over $259 million today.”

Balance Sheet

As on April 30, 2017, Argan’s cash & cash equivalents was $167.35 million. The Company as per the quarter end did not have any bank debt. Argan’s contract backlog was an aggregate value of approximately $867 million as of April 30, 2017. In addition, subsequent to the end of the quarter, Atlantic Projects Company won a contract for the erection of a 299 MW biomass boiler in Teesside, England.

Argan’s accounts receivables increased to $71.3 million, or 30%, from $54.8 million in Q1 2016. Argan’s accounts payable totaled $118 million up 15.8% from Q1 2016. The Company had a ROE of nearly 6.5% during the quarter.

Stock Performance

On Monday, June 26, 2017, the stock closed the trading session at $61.80, climbing 1.81% from its previous closing price of $60.70. A total volume of 142.41 thousand shares have exchanged hands. Argan’s stock price skyrocketed 1.15% and 56.96% in the previous month and in the last twelve months, respectively. The stock is trading at a PE ratio of 12.30 and has a dividend yield of 1.13%. The stock currently has a market cap of $951.72 million.

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