U.S. markets closed
  • S&P Futures

    3,293.50
    +30.00 (+0.92%)
     
  • Dow Futures

    26,655.00
    +246.00 (+0.93%)
     
  • Nasdaq Futures

    11,234.00
    +101.25 (+0.91%)
     
  • Russell 2000 Futures

    1,550.90
    +11.70 (+0.76%)
     
  • Crude Oil

    37.39
    0.00 (0.00%)
     
  • Gold

    1,879.50
    +0.30 (+0.02%)
     
  • Silver

    23.44
    +0.09 (+0.37%)
     
  • EUR/USD

    1.1755
    +0.0006 (+0.05%)
     
  • 10-Yr Bond

    0.7810
    +0.0030 (+0.39%)
     
  • Vix

    40.28
    +6.93 (+20.78%)
     
  • GBP/USD

    1.2993
    +0.0006 (+0.05%)
     
  • USD/JPY

    104.4770
    +0.1760 (+0.17%)
     
  • BTC-USD

    13,196.35
    -20.94 (-0.16%)
     
  • CMC Crypto 200

    260.98
    -11.71 (-4.30%)
     
  • FTSE 100

    5,582.80
    -146.19 (-2.55%)
     
  • Nikkei 225

    23,261.98
    -156.53 (-0.67%)
     

Fortune Brands (FBHS) Q3 Earnings & Revenues Miss Estimates

Zacks Equity Research

Fortune Brands Home & Security, Inc. FBHS reported financial results for third-quarter 2019, wherein earnings before charges/gains were 95 cents per share, missing the Zacks Consensus Estimate of 97 cents. Notably, on a year-over-year basis, the bottom line improved 2.2% on the back of sales growth.

Fortune Brands’ net sales were $1,459 million, increasing 6% from the year-ago figure. The rise was driven by healthy growth in Plumbing and Doors & Security segments.

However, the top line missed the consensus estimate of $1,489 million.

Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise

Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise

Fortune Brands Home & Security, Inc. price-consensus-eps-surprise-chart | Fortune Brands Home & Security, Inc. Quote

Segmental Details

The company’s segmental results are discussed below:

Cabinets segment’s sales decreased 2% year over year to $589.7 million. Growth in sales of value products was offset by weakness in premium and semi-custom.

Plumbing sales jumped 11% to $514.1 million on the back of organic sales growth of about 12%.

Doors & Security segment’s sales increased 11% to $355.2 million, backed by gains from the buyout of Fiberon.

Costs & Expenses

In the third quarter, Fortune Brands’ cost of sales before charges/gains increased 5% year over year to $934.8 million. It represented 64.1% of net sales compared with 64.2% in the year-ago quarter. Selling, general and administrative expenses jumped 2% to $311.3 million, and represented 21.3% of the net sales compared with 22.1% a year ago.

Operating income before charges/gains increased 14% to $168 million. Operating margin before charges/gains climbed 80 basis points to roughly 11.5%. Interest expenses increased 24% to $23.6 million.

Balance Sheet

Exiting the third quarter, Fortune Brands’ cash and cash equivalents were $336.2 million, up 27.9% from $262.9 million at the end of the 2018. Its long-term debt increased 7.7% to $1,949 million from the end of last year.

In the first nine months of 2019, net cash provided by operating activities were $353.8 million, reflecting 2.9% increase year over year. Capital expenditure amounted to $82.4 million, down from $106.5 million.

Outlook

Sales for 2019 are expected to increase in the range of 5-6% compared with 5.5-6.5% rise predicted earlier. Earnings before charges/gains are estimated to be $3.53-$3.63 per share, lower than the $3.53-$3.67 guided previously.

Zacks Rank & Key Picks

Fortune Brands currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Cimpress N.V CMPR, Brady Corporation BRC and Dover Corporation DOV. While Cimpress sports a Zacks Rank #1 (Strong Buy), Brady and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cimpress’ earnings surprise in the last reported quarter was a positive 137.04%.

Brady delivered average positive earnings surprise of 9.68% in the trailing four quarters.

Dover pulled off average positive earnings surprise of 6.70% in the trailing four quarters.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


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
 
Dover Corporation (DOV) : Free Stock Analysis Report
 
Cimpress N.V (CMPR) : Free Stock Analysis Report
 
Fortune Brands Home & Security, Inc. (FBHS) : Free Stock Analysis Report
 
Brady Corporation (BRC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research