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AMCOL International Corporation Message Board

  • steve_382 steve_382 Jan 19, 2007 12:12 PM Flag

    Earnings and CC Today

    Earnings seemed pretty good and the CC was OK, if conservative. Seems like this management is intelligent and competent. I don't see any reason not to stay long.

    Steve

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    • Their releases and CC are timely, informative and focused. I don't understand why ACO doesn't get a higher PE given their growth and international exposure. Here are some notes I made on the call itself:

      tax rate to go from 19% to close to 25%; however, adjusted for .09N (non-recurring) in 3rd quarter due to tax benefits of an audit, effective tax rate for year was 22.8%, and 25% estimate doesn't allow for more profits overseas, but does consider some loss of tax holidays; so say rate goes to 24.8% and remember that joint venture income is after tax, and amounts to 12.2% of total income after tax, increase in tax rate will cost 2.2% of what 2007 eps would otherwise be had effective tax rate stayed at the same level of 22.8%.
      expect good growth in oilfield services despite current price of oil/gas as companies expect to make profit at these levels
      metalcasting may decline more in US, but overall will be slow growth due to overseas, esp as bring on new China plants by end of 1st qtr.
      JV income is somewhat dependent on shipments, esp. bauxite ops; while drop in 4th qtr, expect year over year increase in 2007
      gas prices have minimal impact on freight profits as charge surcharge (but what about their own ops?); some weakness due to economy
      cat litter and detergents had good quarter, not phenomenal.
      capex won't decline next year, which is a little surprising as more big projects this year.
      as always, on lookout for acquisitions, but probably won't be at level of this year.

 
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