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Macquarie's (MIC) Q3 Earnings Rise Y/Y, Revenues Decline

Zacks Equity Research

Macquarie Infrastructure Company MIC reported income per share of 71 cents in third-quarter 2019. The figure was higher than 25 cents per share reported in the year-ago quarter. Lower operating expenses were primarily responsible for the year-over-year increase.

On an adjusted basis, the company’s earnings came in at 98 cents per share, in line with the Zacks Consensus Estimate.

Macquarie generated revenues of $405 million, down 3.8% year over year.  The decline was attributable to divesture of some of its businesses in 2018. Product revenues came in at $58 million, a decrease of 3.3%. Service revenues declined 3.9% to $347 million. The top line missed the Zacks Consensus Estimate of $417 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

Segment Details

Revenues from International-Matex Tank Terminals came in at $118 million, flat year over year. It represented 29% of the company’s third-quarter revenues. The segment’s EBITDA decreased 10.1% to $62 million.

Atlantic Aviation generated revenues of $230 million, down 2.1% year over year and accounted for 56.7% of the company’s overall revenues. The segment’s EBITDA fell 1.5% to $64 million.

Revenues in MIC Hawaii came in at $58 million, down 15.9% year over year. It represented 14.3% of overall quarterly revenues. The segment’s EBITDA increased to $12 million.

Operating Costs

In the third reported quarter, Macquarie’s cost of services decreased 7.8%, whereas cost of product sales increased 10% year over year.

Selling and administrative expenses were $81 million, an increase of 3.8% year over year. Overall, operating expenses declined 5.2% to about $349 million.

Liquidity & Cash Flow

As of Sep 30, 2019, the company had cash and cash equivalents of $473 million, down from $589 million on Dec 31, 2018. Long-term debt was $2,654 million, up from $2,653 million recorded at the end of 2018.

Macquarie authorized cash dividend of $1.00 per share for the third quarter, payable Nov 14 to shareholders of record as on Nov 11.

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, HC2 Holdings, Inc. HCHC and KushCo Holdings, Inc. KSHB. 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 18.58% in the trailing four quarters.

HC2 Holdings pulled off average positive earnings surprise of 48.55% in the trailing four quarters.

KushCo Holdings’ earnings surprise in the last reported quarter was 14.29%.

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