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Macquarie Infrastructure's (MIC) Q2 Earnings Decline Y/Y

Zacks Equity Research

Macquarie Infrastructure Company MIC reported diluted income per share of 13 cents in second-quarter 2019. Notably, the figure was lower than 45 cents per share reported in the year-ago quarter. Higher selling, general and administrative and depreciation costs and rise in interest expenses were primarily responsible for the year-over-year decline.

Macquarie generated revenues of $416 million, down 4.6% year over year.  The decline was attributable to divesture of some of its businesses in 2018. Product revenues came in at $61 million, an increase of 1.7%. However, service revenues declined 5.6% to $355 million. Notably, the top line surpassed the Zacks Consensus Estimate of $412 million.

Segment Details

Revenues from International-Matex Tank Terminals came in at $119 million, down 7.8% year over year. It represented 28.6% of the company’s second-quarter revenues. The segment’s EBITDA decreased 14% to $64 million.

Macquarie Infrastructure Company Price, Consensus and EPS Surprise

Macquarie Infrastructure Company Price, Consensus and EPS Surprise

Macquarie Infrastructure Company price-consensus-eps-surprise-chart | Macquarie Infrastructure Company Quote

Atlantic Aviation generated revenues of $236 million, up 1% year over year and accounted for 56.7% of the company’s overall revenues. The segment’s EBITDA rose 3% to $62 million.

Revenues in MIC Hawaii came in at $61 million, down 19% year over year. It represented 14.7% of overall quarterly revenues. The segment’s EBITDA increased 27% to $14 million.

Operating Costs

In the reported quarter, Macquarie’s cost of services decreased 10%, whereas cost of product sales increased 10% year over year.

Selling and administrative expenses were $84 million, an increase of 2% year over year. Overall, operating expenses declined 4% to about $361 million.

Liquidity & Cash Flow

As of Jun 30, 2019, the company had cash and cash equivalents of $573 million and long-term debt of about $2,653 million. Its adjusted free cash flow for the quarter declined 26% year over year to $95 million.

Macquarie authorized cash dividend of $1.00 per share for the second quarter, payable Aug 15 to shareholders of record as on Aug 12.

Guidance

The company expects 2019 adjusted EBITDA in the range of $600-$625 million. It expects to generate adjusted free cash flow in the band of $390-$435 million.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the same space are Carlisle Companies Incorporated CSL, Danaher Corporation DHR and United Technologies Corporation UTX. All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carlisle delivered average earnings surprise of 17.16% in the trailing four quarters.

Danaher pulled off average positive earnings surprise of 3.25% in the trailing four quarters.

United Technologies delivered average earnings surprise of 13.19% in the trailing four quarters.

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