Ferro's (FOE) Earnings and Revenues Trail Estimates in Q3
Ferro Corporation FOE logged a profit of $16.1 million or 19 cents per share in third-quarter 2018, down roughly 29.6% from a profit of $22.8 million or 27 cents per share a year ago.
Barring one-time items, earnings were 37 cents for the reported quarter, which trailed the Zacks Consensus Estimate of 40 cents.
Ferro’s revenues went up roughly 12.9% year over year to $395.2 million in the quarter, but missed the Zacks Consensus Estimate of $399.8 million.
The top line in the reported quarter was supported by organic and inorganic growth and strong demand in end-markets. Organic sales rose around 7.3% in the quarter on a constant currency basis.
Ferro Corporation Price, Consensus and EPS Surprise
Ferro Corporation Price, Consensus and EPS Surprise | Ferro Corporation Quote
Revenues from the Performance Coatings segment rose 20.3% year over year to $175.9 million in the reported quarter. Gross profit for the unit expanded 2.2% year over year to $36.3 million.
The Performance Colors and Glass division raked in sales of $123.3 million, up around 11.5% year over year. Gross profit rose 5.8% year over year to $40.1 million.
Revenues from the Color Solutions unit came in at $95.9 million, up roughly 3% year over year. Gross profit fell 2.8% year over year to $30.2 million.
Ferro ended the quarter with cash and cash equivalents of around $126.3 million, a more than two-fold year over year increase. Long-term debt was around $923.6 million, up around 37% year over year.
Cash flows from operating activities increased to around $73.4 million in the reported quarter from roughly $20 million a year ago.
The company repurchased shares worth $11 million during the third quarter. Ferro’s board approved a new share buyback program, authorizing the company to repurchase up to an additional $50 million of its outstanding common stock.
Moving ahead, Ferro envisions strong demand across its end-markets to continue in the fourth quarter. The company expects adjusted earnings per share and adjusted EBITDA for 2018 to be at the lower end of the guidance ranges of $1.55-$1.60 and $270-$275 million, respectively. Adjusted free cash flow conversion has been forecast at the upper end of the guidance range of 40-45%.
Ferro has underperformed the industry it belongs to over the past six months. The company’s shares have lost around 9.5% over this period compared with the industry’s decline of 1.4% over the same period.
Zacks Rank & Stocks to Consider
Ferro currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include The Mosaic Company MOS, CF Industries Holdings, Inc. CF and KMG Chemicals, Inc. KMG.
Mosaic has expected long-term earnings growth rate of 7% and sports a Zacks Rank #1 (Strong Buy). Its shares have surged 60% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has expected long-term earnings growth rate of 6% and carries a Zacks Rank #1. Its shares have rallied 27% in a year.
KMG Chemicals has expected long-term earnings growth rate of 28.5% and carries a Zacks Rank #2 (Buy). Its shares have shot up 50% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ferro Corporation (FOE) : Free Stock Analysis Report
KMG Chemicals, Inc. (KMG) : Free Stock Analysis Report
The Mosaic Company (MOS) : Free Stock Analysis Report
CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research