Actuant Swings To Q3 Profit, Results Top View, But Trims 2014 Outlook

(RTTNews) - Industrial products manufacturer Actuant Corp. (ATU) reported Wednesday a profit for the third quarter compared to a net loss last year, which was weighed down by hefty loss from discontinued operations. Both adjusted earnings per share from continuing operations and quarterly sales topped analysts' expectations. The company also trimmed its guidance for the full-year 2014.

"I am pleased with the results for the third quarter which were in line with our guidance, including 3% core growth and EPS at the mid-point of our range, excluding the income tax planning benefit. Energy and Engineered Solutions both delivered a solid 5% increase in core sales, while Industrial's core sales growth rate improved sequentially," CEO Mark Goldstein said in a statement.

The Menomonee Falls, Wisconsin-based company reported net earnings of $50.56 million or $0.70 per share for the third quarter, compared to a net loss of $92.98 million or $1.24 per share in the prior-year quarter. Results for the latest quarter includes a $0.07 tax planning benefit.

Earnings per share from continuing operations grew to $50.56 million or $0.70 from last year's $46.08 million or $0.62.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Net Sales for the quarter increased 10 percent to $378.19 million from $344.21 million in the same quarter last year, and topped ten Wall Street analysts' consensus estimate of $376.57 million by a whisker.

Meanwhile, core sales, excluding the impact of acquisitions, divestitures and foreign exchange rates, grew only 3 percent. Acquisitions contributing 5 percent and foreign currency translation 2 percent.

On a segmental basis, sales from the industrial segment edged down 1 percent, while energy segment sales improved 26 percent, and engineered solutions segment sales increased 7 percent from last year.

Operating margins for the quarter contracted 110 basis points to 15.5 percent from last year's 16.6 percent.

"Our targeted margin improvement activities are progressing, but third quarter results included unfavorable segment mix, choppy demand, and costs and inefficiencies related to the facility closures, consolidations and relocations that we are completing to simplify our business," Goldstein added.

The company completed the sale of its recreational vehicle business to Drew Industries, Inc. (DW) on Monday for gross proceeds of $35 million as part of its ongoing portfolio management.

Looking ahead to the fourth quarter, the company expects earnings in a range of $0.48 to 0.53 per share, on projected sales between $350 million and $360 million. Analysts expect the company to report earnings of $0.61 per share on net sales of $372.87 million for the quarter.

For fiscal 2014, the company currently expects earnings in a range of $1.92 to $1.97 per share, on projected annual net sales of about $1.4 billion. The company was previously looking for fiscal 2014 earnings in the range of $2.00 to $2.10 per share, and revenues between $1.41 billion and $1.45 billion.

Street is currently looking for full-year 2014 earnings of $1.99 per share on net sales of $1.41 billion.

ATU closed Tuesday's regular trading session at $36.30, down $0.66 on a volume of 0.61 million shares.