Luxfer Group Lags Earnings Est.

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Luxfer Group Lags Earnings Est.
 
Luxfer Group (LXFR) reported its first quarter 2013 financial results on May 7, 2013. Adjusted net income in the quarter plummeted 15.3% year over year and came in at $9.4 million. Earnings per ADS in the quarter were 34 cents, missing the Zacks Consensus Estimate of 43 cents.

Revenue

Revenues for Luxfer Group were down 13.4% to $122.4 million. Results were negatively impacted by negative foreign currency translation to the tune of $1.5 million.

Gas Cylinders Division generated roughly $68.4 million in revenues, up 11.9% year over year while the Elektron Division’s revenues amounted to $54.0 million, down 32.8% year over year.

Margins

Cost of sales in the first quarter went down 12.6% year over year and represented 76.9% of total revenue; up slightly from 76.2% in the year-ago quarter. Distribution and administrative costs, as a percentage of total revenue, stood at 1.3% and 9.6%, respectively. Operating margin in the quarter was 11.8%, down 110 basis points year over year.

Balance Sheet

Exiting the first quarter 2013, cash and short-term deposits balance of Luxfer Group stood at $37.0 million, down 8.0% from $40.2 million in the previous quarter. Bank and other loans at the end of the quarter stood at $63.5 million.
 
Cash Flow

Net cash flow from operating activities in the quarter was $9.6 million, flat year over year while capital expenditure was at $3.9 million versus $3.1 million in the year-ago quarter.

Outlook

Management at Luxfer Group anticipates trading profit to be $1.5-$2.5 million, higher sequentially in the second quarter of 2013 while roughly $2.0-$5.0 million higher year over year in 2013.

Luxfer Group currently has a market capitalization of $506 million and carries a Zacks Rank #2 (Buy). Other stocks to watch out for are Graco Inc. (GGG), Middleby Corp. (MIDD) and Tri-Tech Holding, Inc. (TRIT), each with a Zacks Rank #1 (Strong Buy).
 

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