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Macquarie (MIC) Q2 Earnings Beat Estimates, Revenues Miss

Zacks Equity Research

Macquarie Infrastructure Corporation MIC reported mixed results in second-quarter 2020 wherein its earnings surpassed estimates, while revenues lagged the same.

On an adjusted basis, the company’s earnings were 53 cents per share, beating the Zacks Consensus Estimate of 46 cents by 15.2%. Notably, the metric declined from $1.21 per share reported in the prior-year quarter.

Macquarie generated revenues of $261 million, down 37.3% year over year.  The decline was attributable to a lackluster performance across its Atlantic Aviation and MIC Hawaii segments. Product revenues were $37 million, marking a decrease of 39.3% year over year. Service revenues declined 37% to $224 million. The top line missed the Zacks Consensus Estimate of $296 million.

Segment Details

Revenues from International-Matex Tank Terminals were $120 million, up 0.8% year over year. It represented 46% of the company’s second-quarter revenues. The segment’s EBITDA increased 6.3% year over year to $68 million.

Atlantic Aviation generated revenues of $104 million, down 56% year over year and accounted for 39.8% of the company’s overall revenues. The segment’s EBITDA declined year over year 73% to $17 million.

Revenues in MIC Hawaii were $37 million, down 39% year over year. It represented 14.2% of overall quarterly revenues. The segment’s EBITDA declined 50% year over year to $7 million.

Macquarie Infrastructure Price, Consensus and EPS Surprise

 

Macquarie Infrastructure Company Price, Consensus and EPS Surprise
Macquarie Infrastructure Company Price, Consensus and EPS Surprise

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

Operating Costs

In the second quarter, Macquarie’s cost of services decreased 54% to $75 million on a year-over-year basis, whereas cost of product sales decreased 60% to $18 million.

Selling and administrative expenses were $83 million, down 1% year over year. Overall, operating expenses declined 33% year over year to about $243 million.

Liquidity & Cash Flow

As of Jun 30, 2020, the company had cash and cash equivalents of $874 million, up from $357 million on Dec 31, 2019. Long-term debt was $3,254 million, up from $2,654 million recorded at the end of 2019. In the first six months of 2020, the company generated net cash of $172 million from operating activities, down 34% year over year.

During the first six months of 2020, the company paid out dividends amounting to $87 million, representing a 49.4% decrease from the year-ago comparable period’s disbursement.

Guidance

The company stated that it remains confident in the outlook for its operating businesses over the medium term despite the uncertainties created by the coronavirus outbreak-led market downturn.

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks are AGCO Corporation AGCO, Berry Global Group, Inc. BERY and Avery Dennison Corporation AVY. While AGCO and Berry Global sport a Zacks Rank #1 (Strong Buy), Avery Dennison carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO delivered an earnings surprise of 409.54%, on average, in the trailing four quarters.

Berry Global delivered an earnings surprise of 16.34%, on average, in the trailing four quarters.

Avery Dennison delivered an earnings surprise of 7.70%, on average, in the trailing four quarters.

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