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Carlisle (CSL) Q1 Earnings & Revenues Top Estimates, Up Y/Y

Zacks Equity Research

Carlisle Companies Incorporated CSL reported better-than-expected first-quarter 2019 results, delivering a positive earnings surprise of 27%.

The company’s adjusted earnings for the reported quarter were $1.41 per share, surpassing the Zacks Consensus Estimate of $1.11. Also, the bottom line increased 39.6% from the year-ago quarter’s figure of $1.01.

Inside the Headlines

In the reported quarter, Carlisle’s net sales were $1,071.9 million, up 8.9% year over year. The improvement was driven by a 5.9% contribution from organic sales growth and 3.9% benefit from acquired assets, partially offset by 0.9% adverse impact of foreign currency translation.

The top line surpassed the Zacks Consensus Estimate of $1,041 million.

Carlisle Companies Incorporated Price, Consensus and EPS Surprise

Carlisle Companies Incorporated Price, Consensus and EPS Surprise | Carlisle Companies Incorporated Quote

The company reports results under four segments — Carlisle Construction Materials (CCM), Carlisle Interconnect Technologies (CIT), Carlisle Fluid Technologies (CFT), and Carlisle Brake & Friction (CBF). Th quarterly segmental results are briefly discussed below:

Revenues from CCM totaled $671.1 million, increasing 12.1% year over year. It represented 62.6% of net sales. Organic sales and acquired assets both had a positive impact of 6.3%. These were partially offset by 0.5% adverse impact of forex woes.

CIT revenues, representing 23% of net sales, were $246.4 million, up 9.9% year over year. The improvement was driven by 10% growth in organic sales and 0.2% benefit from acquired assets, partially offset by 0.3% adverse impact of unfavorable movements in foreign currencies.

CFT revenues, representing 5.9% of net sales, were $63.1 million, down 0.6% year over year. In the reported quarter, organic sales grew 2.2% while forex woes had an adverse 2.8% impact.

CBF revenues were $91.3 million, decreasing 7.1% year over year. It represented 8.5% of net sales in the quarter under review. Organic sales declined 3.8% while unfavorable movements in foreign currencies had a 3.3% adverse impact.

Operating Margin

In the reported quarter, Carlisle’s cost of sales grew 6.5% year over year to $783.3 million. It represented 71.7% of net sales versus 74.7% recorded in the year-ago quarter.

Selling and administrative expenses grew 10.5% to $164.2 million. It represented 15.3% of net sales versus 15.1% in the year-ago quarter. Research and development expenses totaled $14.4 million compared with $13.9 million a year ago.

Operating profit was $114.7 million, up 21.1% year over year, while margin expanded 110 basis points to 10.7%. Margin benefited from improved sales volume, Carlisle Operating System (“COS”) and price realizations. These were partially offset by labor costs and unfavorable mix.

Balance Sheet and Cash Flow

Exiting the first quarter of 2019, Carlisle had cash and cash equivalents of $516.6 million compared with $803.6 million recorded as of Dec 31, 2018. Long-term debt was roughly flat at $1,588.5 million.

Outlook

For 2019, Carlisle expects that stellar end-market demand and pricing actions will continue to drive its revenues. Execution of COS, improved top-line performance and acquisition benefits will likely boost its near-term profitability.

On a segmental basis, sales are anticipated to grow in a low-double digit range for CCM, in a mid-to-high single digit range for CIT, mid-single digit range for CFT and remain flat for CBF.

Zacks Rank & Key Picks

Carlisle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the space are are DXP Enterprises, Inc. DXPE, Honeywell International Inc. HON and Federal Signal Corporation FSS. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Honeywell and Federal Signal carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises delivered average earnings surprise of 46.55% in the trailing four quarters.

Honeywell pulled off average positive earnings surprise of 3.50% in the trailing four quarters.

Federal Signal delivered average earnings surprise of 21.65% in the trailing four quarters.

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