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Hillenbrand (HI) Q4 Earnings, Sales Top Estimates, Improve Y/Y
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Hillenbrand Inc. (HI - Free Report) posted fourth-quarter fiscal 2017 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year. Notably, this marked the company’s sixth earnings beat in a row. Hillenbrand has mainly been gaining from strength at its Process Equipment segment, which has also helped the company’s shares jump 6.6% in the past six months, outperforming the industry’s 4.5% rise.
Q4 Highlights
Adjusted earnings of 62 cents per share jumped 7% year over year surpassed the Zacks Consensus Estimate of 58 cents. However, the bottom-line growth was somewhat hurt by higher effective tax rate in the quarter.
Hillenbrand's total revenues advanced 3% year over year to $443 million, courtesy of higher revenues at Process Equipment, partly negated by softness at Batesville. Also, revenues came ahead of the Zacks Consensus Estimate of $427 million.
Adjusted EBITDA increased 4% to $82 million, and adjusted EBITDA margin improved 110 basis points to 18.5% on the back of pricing and productivity enhancements. This was somewhat offset by inflation and unfavorable mix.
Segment Details
Process Equipment Group: Segment revenues jumped 7% to $304 million on the back of solid demand for systems and equipment that are used for food and pharma projects and engineered plastics. Also, increased demand for screening and separating equipment fueled segment revenues. Order backlog increased 26% year over year and 4% on a sequential basis to $632 million, backed by plastics and flow control projects.
Adjusted EBITDA margin expanded 90 basis points to 18.9% in the quarter driven by better pricing and productivity, partly countered by unfavorable mix.
Batesville: Segment revenues declined 4% to $139 million due to reduced demand for burial caskets which stems from families rising preference for cremation.
Batesville adjusted EBITDA margin improved 130 basis points to 24.9% owing to productivity enhancements, countered by soft volumes and escalated commodity and fuel expenses.
Fiscal 2017 Synopsis
Hillenbrand’s fiscal 2017 adjusted earnings came in at $2.11 per share, which grew 5% year over year and cruised way ahead of the consensus mark of $2.06. Further, revenues climbed 3% to $1,590.2 million accountable to strength in the Process Equipment segment. This also beat the consensus estimate of $1,574 million. Moreover, management stated that the Process Equipment unit generated higher adjusted EBITDA margin for the fourth consecutive year, backed by constant focus on the Hillenbrand Operating Model.
Other Financial Updates
Hillenbrand ended fiscal 2017 with cash and cash equivalents of $66 million. Further, the company generated cash flow from operations of nearly $246.2 million in the fiscal, while free cash flow came in at $224.2 million.
Fiscal 2018 Guidance
Management remains encouraged about fiscal 2018, wherein it anticipates the Process Equipment unit to witness continued organic growth. The Zacks Rank #3 (Hold) company expects this to be supported by its robust backlog level, which seems to be the highest in three years.
For fiscal 2018, Hillenbrand expects revenues to advance 2-4%. Further, adjusted earnings per share are envisioned in a band of $2.16 to $2.28, in comparison with $2.11 recorded in fiscal 2017. However, the consensus estimate is currently pegged slightly higher, at $2.29.
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McCormick delivered an average positive earnings surprise of nearly 4% in the trailing four quarters. It has a long-term earnings growth rate of 9.4%.
Constellation Brands reported an average positive earnings surprise of 13.6% in the trailing four quarters. It has a long-term earnings growth rate of 18.4%.
Service Corporation delivered an average positive earnings surprise of 20.5% in the trailing four quarters. It has a long-term earnings growth rate of 11.2%.
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Hillenbrand (HI) Q4 Earnings, Sales Top Estimates, Improve Y/Y
Hillenbrand Inc. (HI - Free Report) posted fourth-quarter fiscal 2017 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year. Notably, this marked the company’s sixth earnings beat in a row. Hillenbrand has mainly been gaining from strength at its Process Equipment segment, which has also helped the company’s shares jump 6.6% in the past six months, outperforming the industry’s 4.5% rise.
Q4 Highlights
Adjusted earnings of 62 cents per share jumped 7% year over year surpassed the Zacks Consensus Estimate of 58 cents. However, the bottom-line growth was somewhat hurt by higher effective tax rate in the quarter.
Hillenbrand Inc Price, Consensus and EPS Surprise
Hillenbrand Inc Price, Consensus and EPS Surprise | Hillenbrand Inc Quote
Hillenbrand's total revenues advanced 3% year over year to $443 million, courtesy of higher revenues at Process Equipment, partly negated by softness at Batesville. Also, revenues came ahead of the Zacks Consensus Estimate of $427 million.
Adjusted EBITDA increased 4% to $82 million, and adjusted EBITDA margin improved 110 basis points to 18.5% on the back of pricing and productivity enhancements. This was somewhat offset by inflation and unfavorable mix.
Segment Details
Process Equipment Group: Segment revenues jumped 7% to $304 million on the back of solid demand for systems and equipment that are used for food and pharma projects and engineered plastics. Also, increased demand for screening and separating equipment fueled segment revenues. Order backlog increased 26% year over year and 4% on a sequential basis to $632 million, backed by plastics and flow control projects.
Adjusted EBITDA margin expanded 90 basis points to 18.9% in the quarter driven by better pricing and productivity, partly countered by unfavorable mix.
Batesville: Segment revenues declined 4% to $139 million due to reduced demand for burial caskets which stems from families rising preference for cremation.
Batesville adjusted EBITDA margin improved 130 basis points to 24.9% owing to productivity enhancements, countered by soft volumes and escalated commodity and fuel expenses.
Fiscal 2017 Synopsis
Hillenbrand’s fiscal 2017 adjusted earnings came in at $2.11 per share, which grew 5% year over year and cruised way ahead of the consensus mark of $2.06. Further, revenues climbed 3% to $1,590.2 million accountable to strength in the Process Equipment segment. This also beat the consensus estimate of $1,574 million. Moreover, management stated that the Process Equipment unit generated higher adjusted EBITDA margin for the fourth consecutive year, backed by constant focus on the Hillenbrand Operating Model.
Other Financial Updates
Hillenbrand ended fiscal 2017 with cash and cash equivalents of $66 million. Further, the company generated cash flow from operations of nearly $246.2 million in the fiscal, while free cash flow came in at $224.2 million.
Fiscal 2018 Guidance
Management remains encouraged about fiscal 2018, wherein it anticipates the Process Equipment unit to witness continued organic growth. The Zacks Rank #3 (Hold) company expects this to be supported by its robust backlog level, which seems to be the highest in three years.
For fiscal 2018, Hillenbrand expects revenues to advance 2-4%. Further, adjusted earnings per share are envisioned in a band of $2.16 to $2.28, in comparison with $2.11 recorded in fiscal 2017. However, the consensus estimate is currently pegged slightly higher, at $2.29.
Looking for More Promising Bets? Check These Trending Picks
Investors interested in the same sector may consider stocks such as McCormick & Company, Inc. (MKC - Free Report) , Constellation Brands, Inc. (STZ - Free Report) and Service Corporation International (SCI - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McCormick delivered an average positive earnings surprise of nearly 4% in the trailing four quarters. It has a long-term earnings growth rate of 9.4%.
Constellation Brands reported an average positive earnings surprise of 13.6% in the trailing four quarters. It has a long-term earnings growth rate of 18.4%.
Service Corporation delivered an average positive earnings surprise of 20.5% in the trailing four quarters. It has a long-term earnings growth rate of 11.2%.
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 >>