Northwest Pipe's (NWPX) Q4 Earnings Trail Estimates - Analyst Blog
Welded steel pipe maker Northwest Pipe NWPX posted a loss from continuing operations of $14 million or $1.47 per share in fourth-quarter 2014 versus a profit of $2.4 million or 25 cents per share a year ago.
Barring a non-cash goodwill impairment charge, earnings were 21 cents per share for the quarter, missing the Zacks Consensus Estimate by a couple of cents.
For full-year 2014, the company logged a loss from continuing operations of $6.2 million or 65 cents per share versus a profit from continuing operations of $21.7 million or $2.27 per share in 2013. Adjusted earnings for 2014 were $1.03 per share, also missing the Zacks Consensus Estimate of $1.05.
Revenues went up roughly 19% year over year to $102.2 million in the quarter on higher sales across both Water Transmission and Tubular Products divisions. But it missed the Zacks Consensus Estimate of $118 million. Gross margin fell to 8.9% from 12.7% a year ago on higher cost of sales.
For 2014, revenues rose around 12% to $403.3 million on gains across the board. Sales, however, trailed the Zacks Consensus Estimate of $419 million.
Northwest Pipe ended 2014 with order backlog of roughly $121 million in the Water Transmission division, up 17% year over year.
Segment Highlights
Revenues from the Water Transmission segment surged roughly 32% year over year to $56.5 million in the reported quarter, boosted by higher production. Gross margin for the unit rose to 17.5% from 16.4% a year ago.
Northwest Pipe’s Tubular Products unit saw a roughly 7% rise in sales to $45.7 million in the quarter. The division posted a gross loss of $0.8 million versus a profit of $3.8 million in the year-ago quarter, affected by lower pricing, unfavorable product mix and higher steel costs. Competition from imports in the line pipe markets continued to hurt margins in this business.
Financials
Northwest Pipe ended 2014 with cash and cash equivalents of $0.5 million, down roughly 10% year over year. Total long-term debt declined around 83% year over year to $2.4 million.
Outlook
Moving ahead, Northwest Pipe sees significant challenges in the first quarter of 2015. It expects revenues in the Water Transmission unit to be similar to the previous quarter while margins are forecast to be in the low to mid-teens in the quarter.
Northwest Pipe envisions lower crude oil prices to have considerable impact on order intake in the near term and also affect production and inventory in the Tubular Products unit. As such, it expects a modest gross loss in the Tubular Products division in the first quarter.
Northwest Pipe currently retains a Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the basic materials sector include NSK Ltd. NPSKY, Norsk Hydro ASA NHYDY and Kobe Steel Ltd. KBSTY with all holding a Zacks Rank #1 (Strong Buy).
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