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Carlisle (CSL) Q4 Earnings Surpass Estimates, Revenues Miss

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Zacks Equity Research
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Carlisle Companies Incorporated CSL reported mixed fourth-quarter 2020 results wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.

The company’s adjusted earnings were $1.48 per share, beating the consensus estimate of $1.17 by 26.5%. However, the bottom line declined 16.9% on a year-over-year basis due to lower revenues.

In 2020, the company’s earnings were $5.80 per share, down 29.2%.

Inside the Headlines

In the reported quarter, Carlisle’s revenues were $1,064.1 million, down 7% year over year. The decline was attributable to 9% fall in organic revenues, partially offset by 1.4% benefit from acquired assets and a positive impact of 0.6% from changes in foreign exchange rates.

The top line missed the Zacks Consensus Estimate of $1,070 million by 0.6%.

In 2020, the company’s revenues came in at $4,245.2 million, down 11.8% year over year.

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

Revenues from CCM totaled $760.8 million, increasing 0.9% year over year. It represented 71.5% of the company’s revenues. Organic revenues grew 0.6% on the back of higher demand for U.S. commercial roofing and polyurethanes.

CIT revenues, representing 14.5% of total revenues, were $154.6 million, down 35.4% year over year. The decline was primarily attributable to a 40.3% fall in organic revenues on account of the significant decrease in orders from Aerospace customers, partially offset by benefits from acquisitions.

CFT revenues, representing 6.9% of total revenues, were $72.9 million, down 8.3% year over year. In the fourth quarter, organic revenues declined 16.1% on account of lower sales volume, particularly in the general industrial markets, partially offset by benefits from acquisitions.

CBF revenues were $75.8 million, increasing 5.4% year over year. It represented 7.1% of revenues. Organic revenues in the quarter increased 2.8%, driven by higher demand in construction and agricultural off-highway vehicle end markets.

Operating Margin Details

In the reported quarter, Carlisle’s cost of sales declined 7.7% to $771.6 million. It represented 72.5% of net sales compared with 73% a year ago.

Selling and administrative expenses increased 5.5% to $164.2 million. It represented 15.4% of net sales compared with 13.6% in the year-ago quarter. R&D expenses totaled $12.6 million, down 20.8%.

Operating income was $111.8 million, down 20.9% year over year, while margin contracted 180 basis points to 10.5%. Margin was adversely impacted by lower sales volumes, wage inflation, higher raw material costs and higher restructuring costs. These were partially offset by benefits from Carlisle Operating System and lower operating expenses.

Balance Sheet and Cash Flow

Exiting 2020, Carlisle had cash and cash equivalents of $902.2 million compared with $719 million at the end of previous quarter. Long-term debt (including current portion) was $2,081.3 million, up from $2,080.3 million sequentially.

In 2020, the company generated net cash of $696.7 million from operating activities compared with $703.1 million a year ago.

Outlook

In 2021, Carlisle expects revenue growth of high single-digits for CCM segment, while that for the CIT segment is expected to decline in the mid to high single-digit range. Encouraged by improving order trend across CFT and CBS end markets, the company anticipates low double-digit revenue growth for both these segments.

Carlisle Companies Incorporated Price and EPS Surprise

Carlisle Companies Incorporated Price and EPS Surprise
Carlisle Companies Incorporated Price and EPS Surprise

Carlisle Companies Incorporated price-eps-surprise | Carlisle Companies Incorporated Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Franklin Electric Co., Inc. FELE, SPX FLOW, Inc. FLOW and Danaher Corporation DHR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Franklin Electric delivered a positive earnings surprise of 12.82%, on average, in the trailing four quarters.

SPX FLOW delivered a positive earnings surprise of 146.55%, on average, in the trailing four quarters.

Danaher delivered a positive earnings surprise of 19.86%, on average, in the trailing four quarters.

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