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Graco (GGG) Earnings & Revenues Surpass Estimates in Q3
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Graco Inc. (GGG - Free Report) reported better-than-expected results in third-quarter 2018.
Earnings and Revenues
Graco’s quarterly adjusted earnings came in at 50 cents per share, up 31.6% year over year. The rise was driven by solid growth in sales as well as strong operational performance. Also, the bottom line surpassed the Zacks Consensus Estimate of 46 cents.
Quarterly revenues came in at $415.9 million, up 9.5% year over year. The top line also surpassed the Zacks Consensus Estimate of $403.6 million. The upside primarily stemmed from impressive performance across all its segments and acquisition benefits.
Segmental Break-Up
Revenues in the Industrial segment during the reported quarter came in at $195.9 million, up 10% year over year. This rise stemmed from strong finishing system sales and solid project activity.
The Process segment recorded revenues of $84.6 million, up 15% year over year. The segment’s improved top-line performance was driven by sales growth across all product applications.
The Contractor segment’s revenues grew 6% to $135.5 million on the back of strong percentage increases in the home center channel, particularly in North America.
Costs and Margins
Cost of products sold in the third quarter was $194.5 million, up 10.7% year over year.
Gross profit margin was 53.2%, down 50 basis points (bps).
Selling, marketing and distribution expenses during the quarter were $57.3 million, relatively flat year over year. Operating margin in the reported quarter was 27.6%, up 90 bps.
Balance Sheet and Cash Flow
Exiting the third quarter, Graco had cash and cash equivalents of $137.6 million, up from $103.7 million recorded as of Dec 29, 2017. Long-term debt was $266.4 million, higher than $226 million recorded at the end of 2017.
In first nine months of 2018, Graco generated $254.3 million cash from operating activities, higher than $246.1 million recorded in the comparable period last year. Capital expenditure totaled $39.6 million, higher than $28.9 million witnessed at the end of the first nine months of 2017.
Outlook
Graco anticipates securing mid-to-high single-digit organic revenue growth in 2018. The company believes that solid end-market demand will boost its near-term revenues and profitability. Nevertheless, the ongoing tariff-related concerns and material cost inflation remain causes of concern.
Zacks Rank & Stocks to Consider
Graco currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Altra Industrial Motion Corp. , Dover Corporation (DOV - Free Report) and Kadant Inc (KAI - Free Report) . While Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy), Dover and Kadant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion surpassed estimates thrice in the trailing four quarters with an average beat of 4.01%.
Dover exceeded estimates in each of the trailing four quarters with an average beat of 6.04%.
Kadant surpassed estimates in each of the trailing four quarters with an average beat of 13.95%.
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Graco (GGG) Earnings & Revenues Surpass Estimates in Q3
Graco Inc. (GGG - Free Report) reported better-than-expected results in third-quarter 2018.
Earnings and Revenues
Graco’s quarterly adjusted earnings came in at 50 cents per share, up 31.6% year over year. The rise was driven by solid growth in sales as well as strong operational performance. Also, the bottom line surpassed the Zacks Consensus Estimate of 46 cents.
Graco Inc. Price, Consensus and EPS Surprise
Graco Inc. Price, Consensus and EPS Surprise | Graco Inc. Quote
Quarterly revenues came in at $415.9 million, up 9.5% year over year. The top line also surpassed the Zacks Consensus Estimate of $403.6 million. The upside primarily stemmed from impressive performance across all its segments and acquisition benefits.
Segmental Break-Up
Revenues in the Industrial segment during the reported quarter came in at $195.9 million, up 10% year over year. This rise stemmed from strong finishing system sales and solid project activity.
The Process segment recorded revenues of $84.6 million, up 15% year over year. The segment’s improved top-line performance was driven by sales growth across all product applications.
The Contractor segment’s revenues grew 6% to $135.5 million on the back of strong percentage increases in the home center channel, particularly in North America.
Costs and Margins
Cost of products sold in the third quarter was $194.5 million, up 10.7% year over year.
Gross profit margin was 53.2%, down 50 basis points (bps).
Selling, marketing and distribution expenses during the quarter were $57.3 million, relatively flat year over year. Operating margin in the reported quarter was 27.6%, up 90 bps.
Balance Sheet and Cash Flow
Exiting the third quarter, Graco had cash and cash equivalents of $137.6 million, up from $103.7 million recorded as of Dec 29, 2017. Long-term debt was $266.4 million, higher than $226 million recorded at the end of 2017.
In first nine months of 2018, Graco generated $254.3 million cash from operating activities, higher than $246.1 million recorded in the comparable period last year. Capital expenditure totaled $39.6 million, higher than $28.9 million witnessed at the end of the first nine months of 2017.
Outlook
Graco anticipates securing mid-to-high single-digit organic revenue growth in 2018. The company believes that solid end-market demand will boost its near-term revenues and profitability. Nevertheless, the ongoing tariff-related concerns and material cost inflation remain causes of concern.
Zacks Rank & Stocks to Consider
Graco currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Altra Industrial Motion Corp. , Dover Corporation (DOV - Free Report) and Kadant Inc (KAI - Free Report) . While Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy), Dover and Kadant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion surpassed estimates thrice in the trailing four quarters with an average beat of 4.01%.
Dover exceeded estimates in each of the trailing four quarters with an average beat of 6.04%.
Kadant surpassed estimates in each of the trailing four quarters with an average beat of 13.95%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>