DXP Enterprises (DXPE) Beats on Q1 Earnings and Revenues
Premium industrial equipment wholesaler, DXP Enterprises, Inc. DXPE reported better-than-expected results in first-quarter 2017.
Over the last six months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 15.69%, outperforming 12.50% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable Value Growth and Momentum Style Score ‘A’.
Earnings and Revenues
Quarterly earnings came in at 17 cents per share, comfortably beating the Zacks Consensus Estimate of 3 cents. The company had reported a loss of 35 cents per share in the year-ago quarter.
Quarterly sales came in at $238.5 million, surpassing the Zacks Consensus Estimate of $227 million. However, the top line in the first quarter came 5.9% lower than the year-ago tally.
Segmental Details: The company reports its revenue results under three heads/segments. Quarterly results are given below:
Service Centers sales were $148.7 million in the quarter, down 11.2% year over year.
Innovative Pumping Solutions sales came in at $49.1 million, up 3.4% year over year.
Supply Chain Services sales were $40.8 million, up 5.5% year over year.
Costs and Margins
Cost of sales in the first quarter was $174 million, as against $184.7 million recorded in the year-ago period. Gross profit margin in the quarter was 27%, contracting 10 basis points (bps) year over year.
Selling, general and administrative expenses were $56.3 million compared to $70.8 million incurred in first-quarter 2016. Operating income in the reported quarter was $8.2 million, as against the operating loss of $2 million incurred in the prior-year quarter.
Adjusted earnings before impairments, interest, taxes, depreciation and amortization (EBITDA) came in at $16.2 million compared to $6.8 million recorded in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the quarter, DXP Enterprises had cash worth roughly $1 million, as against $1.6 million recorded at the end of 2016. Long-term debt was $2.5 million compared to $173.3 million recorded as of Dec 31, 2016.
During the first three months of 2017, the company used cash worth $2.2 million for its operating activities, as against $7.6 million cash used in the year-earlier quarter. Capital expenditure was $0.6 million versus $1.7 million recorded in the year-ago period.
Outlook
DXP Enterprises is well poised to fortify its business on the back of greater innovation and improved operational efficacy.
Other Stocks to Consider
Some other top ranked stocks in the industry are listed below:
Caterpillar Inc‘s CAT has a positive average earnings surprise of 40.25% for the trailing four quarters and currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. AIT, which sports a Zacks Rank #1 at present, has a positive average earnings surprise of 9.78% for the last four quarters.
Avery Dennison Corporation AVY carries a Zacks Rank #2 and delivered a positive average earnings surprise of 5.53% over the past four quarters.
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