We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Graco Inc.’s (GGG - Free Report) second-quarter 2024 adjusted earnings of 77 cents per share beat the Zacks Consensus Estimate of 76 cents. The bottom line grew 3% year over year.
The company’s net sales of $553.2 million missed the consensus estimate of $561 million. The top line fell 1% year over year due to decreasing demand in the sealant and adhesives, powder coating equipment and semiconductor businesses.
On a regional basis, quarterly sales generated from the Americas increased 5% year over year. In Europe, the Middle East and Africa, sales decreased 6% year over year. Sales from the Asia Pacific decreased 18% year over year.
Segmental Details
Net sales in the Industrial segment totaled $155.7 million (contributing to 28.1% of the quarter’s sales), which decreased 5% year over year. Core sales decreased 4% year over year. Our estimate for segmental net sales was $158.0 million.
Net sales in the Process segment grossed $127.9 million (contributing to 23.2% of the quarter’s sales), down 9% year over year. Our estimate for the segment’s net sales was $148.7 million. Core sales declined 9% year over year.
Net sales in the Contractor segment totaled $269.6 million (contributing to 48.7% of the quarter’s sales), up 5% year over year. Our estimate for segmental net sales was $255.8 million. Core sales increased 6%.
In the second quarter, Graco’s cost of sales declined 5.9% year over year to $252.4 million. Gross profit increased 3.3% to $300.9 million while the margin rose 2 percentage points. The favorable effects of realized pricing and lower product costs benefited the margin’s performance.
Operating income increased 3% year over year to $161.4 million. The operating margin increased 1.1 percentage points from the year-ago quarter. Interest expenses in the second quarter totaled $0.6 million compared with $1.8 million reported in the previous year quarter. The adjusted effective tax rate was 20.0% while the same for the year-ago quarter was 19.4%.
Balance Sheet and Cash Flow
Exiting the second quarter, Graco had cash and cash equivalents of $666 million compared with $538 million at the end of 2023.
It generated net cash of $257.9 million from operating activities in the first six months of 2024 compared with $282.3 million generated in the year-ago period. Capital used for purchasing property, plant and equipment totaled $73.4 million compared with $92.2 million in the year-ago period.
Graco paid out dividends worth $86 million to its shareholders in the first six months of 2024, up 8.9% from the previous year. It repurchased shares worth $17.8 million in the same period.
Outlook
The company expects organic net sales to decline in the low single-digits on a constant-currency basis for 2024.
Zacks Rank & Stocks to Consider
GGG currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
It has a trailing four-quarter average earnings surprise of 8.2%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings has been stable in the past 60 days.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 21.7%.
In the past 60 days, the consensus estimate for Flowserve’s 2024 earnings has remained stable.
Emerson Electric Co. (EMR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 10.7%.
In the past 60 days, the Zacks Consensus Estimate for EMR’s 2024 earnings has increased 0.4%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Graco (GGG) Q2 Earnings Beat Estimates, Sales Decline Y/Y
Graco Inc.’s (GGG - Free Report) second-quarter 2024 adjusted earnings of 77 cents per share beat the Zacks Consensus Estimate of 76 cents. The bottom line grew 3% year over year.
The company’s net sales of $553.2 million missed the consensus estimate of $561 million. The top line fell 1% year over year due to decreasing demand in the sealant and adhesives, powder coating equipment and semiconductor businesses.
On a regional basis, quarterly sales generated from the Americas increased 5% year over year. In Europe, the Middle East and Africa, sales decreased 6% year over year. Sales from the Asia Pacific decreased 18% year over year.
Segmental Details
Net sales in the Industrial segment totaled $155.7 million (contributing to 28.1% of the quarter’s sales), which decreased 5% year over year. Core sales decreased 4% year over year. Our estimate for segmental net sales was $158.0 million.
Net sales in the Process segment grossed $127.9 million (contributing to 23.2% of the quarter’s sales), down 9% year over year. Our estimate for the segment’s net sales was $148.7 million. Core sales declined 9% year over year.
Net sales in the Contractor segment totaled $269.6 million (contributing to 48.7% of the quarter’s sales), up 5% year over year. Our estimate for segmental net sales was $255.8 million. Core sales increased 6%.
Graco Inc. Price, Consensus and EPS Surprise
Graco Inc. price-consensus-eps-surprise-chart | Graco Inc. Quote
Margin Profile
In the second quarter, Graco’s cost of sales declined 5.9% year over year to $252.4 million. Gross profit increased 3.3% to $300.9 million while the margin rose 2 percentage points. The favorable effects of realized pricing and lower product costs benefited the margin’s performance.
Operating income increased 3% year over year to $161.4 million. The operating margin increased 1.1 percentage points from the year-ago quarter. Interest expenses in the second quarter totaled $0.6 million compared with $1.8 million reported in the previous year quarter. The adjusted effective tax rate was 20.0% while the same for the year-ago quarter was 19.4%.
Balance Sheet and Cash Flow
Exiting the second quarter, Graco had cash and cash equivalents of $666 million compared with $538 million at the end of 2023.
It generated net cash of $257.9 million from operating activities in the first six months of 2024 compared with $282.3 million generated in the year-ago period. Capital used for purchasing property, plant and equipment totaled $73.4 million compared with $92.2 million in the year-ago period.
Graco paid out dividends worth $86 million to its shareholders in the first six months of 2024, up 8.9% from the previous year. It repurchased shares worth $17.8 million in the same period.
Outlook
The company expects organic net sales to decline in the low single-digits on a constant-currency basis for 2024.
Zacks Rank & Stocks to Consider
GGG currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It has a trailing four-quarter average earnings surprise of 8.2%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings has been stable in the past 60 days.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 21.7%.
In the past 60 days, the consensus estimate for Flowserve’s 2024 earnings has remained stable.
Emerson Electric Co. (EMR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 10.7%.
In the past 60 days, the Zacks Consensus Estimate for EMR’s 2024 earnings has increased 0.4%.