Post Earnings Coverage as Actuant Tops Earnings Forecast

LONDON, UK / ACCESSWIRE / October 3, 2016 / Active Wall St. announces its post-earnings coverage on Actuant Corporation (NYSE: ATU). The company released its fourth quarter and fiscal year 2016 on September 28th, 2016. The company reported 16th consecutive year of annual free cash flow conversion of net earnings above 100%. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on ATU. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=ATU.

Earnings Reviewed

For the three months and year ended on August 31st, 2016, Actuant reported consolidated sales of $276 million, 8% below the $300 million in the comparable prior year’s quarter. Core sales declined 11%, unfavorable foreign currency exchange rate changes negatively impacted sales by 1% and the net impact of acquisitions and divestitures added 4%. The sales number was below Wall Street’s forecast of $277.6 million.

For Q4 FY16, the company reported net income of $17.4 million, or $0.29 per share, compared to net income of $22.1 million, or $0.37 per share, in Q4 FY15. Q4 FY16 net income included a $5.1 million pre-tax loss on the Sanlo product line divestiture. It also included $3.1 million in pre-tax restructuring charges. On an adjusted basis, Actuant reported earnings of $0.30 per share compared to $0.37 in the prior year quarter, topping analysts’ expectations of $0.29 per share.

Actuant’s FY16 sales were $1.15 billion, 8% lower than the $1.25 billion in the prior year. Excluding the 3% decline from the stronger US dollar and 1% benefit from acquisitions net of divestitures, full year core sales declined 6%. The FY16 net loss was $105.2 million, or $1.78 per share, compared to earnings of $19.9 million, or $0.32 per share, in the prior year.

Segment Sales

During Q4 FY16, sales from Actuant’s Industrial segment sales declined 6% on y-o-y basis to $94 million. The Larzep acquisition added 2% to Q4 FY16 sales growth while currency translation was neutral resulting in a core sales decline of 8%. Integrated Solutions sales improved on a year-over-year basis due to higher standard product sales, yet project activity remains lumpy. Industrial Tool demand declined year-over-year, the result of continued tepid global activity across most served markets. In the company’s Energy segment sales declined 9% in Q4 FY16 to $91 million. Excluding the unfavorable 4% foreign currency headwind, and 10% acquisition benefit, core sales declined 15%, in line with expectations. Actuant’s Engineered Solutions segment reported sales of $90 million, 9% below the prior year.

Costs and Margins

For Q4 FY16, Actuant’s cost of sales came in at $179.5 million, down 7.4% on y-o-y basis. The Menomonee Falls, Wisconsin-based Company’s gross margin contracted 60 basis points (bps) to 34.9%. The decline was due to lower sales volumes, weaker production and absorption volumes, and unfavorable business mix.

Financial Position

Net debt at August 31, 2016 was $405 million (total debt of $585 million less $180 million of cash), which was $45 million lower than the prior quarter end due to strong cash flow and approximately $10 million of proceeds from the Sanlo divestiture. As of August 31, 2016, the Company had cash and cash equivalents of $179.6 million, up from $168.8 million as of Aug 31, 2015. During the quarter, Actuant generated cash worth $42.7 million from its operating activities as against $87.8 million a year ago. During Q4 FY16, Actuant repurchased 0.1 million common shares for $3 million.

Outlook

For Q1 FY17, Actuant is forecasting earnings in the range of $0.14 per share to $0.19 per share on revenue between $260 million to $270 million. Analysts are expecting for earnings of $0.29 per share on revenue of $294 million, including core sales decline of 14%−16%. For FY17, the company is predicting earnings between $1.00 per share to 1.20 per share on revenues in the range of $1.075 billion to $1.125 billion.

Stock Performance

Actuant’s stock is trading up by 4.08%, closing Friday’s session at $23.24 on volume of 994.78 thousand shares. The company’s shares gained 2.79% in the last three months. Additionally, the stock has advanced 24.30% in the last twelve months. The company’s shares have a dividend yield of 0.17%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 446387