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Milacron Holdings Corp. MCRN delivered third-quarter 2018 adjusted earnings per share of 43 cents ahead of the Zacks Consensus Estimate of 41 cents. On a year-over-year basis earnings declined 2%.
Including one-time items, the company reported earnings per share of 21 cents in the quarter under review, improving 24% from the year-ago quarter’s figure of 17 cents per share.
Milacron’s revenues fell 2% to $308 million from the year-ago quarter. Revenues fell short of the Zacks Consensus Estimate of $320 million. Excluding favorable effects of currency movements, organic sales decreased 0.3% from the prior-year quarter. New orders in the reported quarter declined 16% year over year to $270 million.
Cost of sales during the third quarter went down 5% year over year to $206 million from the prior-year quarter. Gross profit increased 4% year over year to $103 million, with gross margin expanding 190 basis points (bps) to 33.3%.
Milacron Holdings Corp. Price, Consensus and EPS Surprise
Milacron Holdings Corp. price-consensus-eps-surprise-chart | Milacron Holdings Corp. Quote
Selling, general and administrative expenses dipped 1.5% year over year to $60 million. Adjusted EBITDA went down 1.2% to $57 million for the reported quarter from $60 million in the prior-year quarter. However, Adjusted EBITDA margin expanded 20 bps to 18.4% in the third quarter.
Advanced Plastic Processing Technologies: Net sales declined 5% year over year to $167 million. Excluding $1.5 million of favorable effects of currency movements, sales increased 2% from the prior-year quarter. Adjusted EBITDA dipped 2% year over year to $23 million.
Melt Delivery and Control Systems: Net sales inched up 1% year over year to $109 million. Excluding favorable influence of currency movements of $0.6 million, sales increased 2% from the prior-year period. Adjusted EBITDA remained flat year over year at $33 million.
Fluid Technologies: Net sales rose 6% year over year to $33 million. Sales improved 8% from the year-ago period, excluding $0.6 million of favorable effects of currency movements. Adjusted EBITDA increased 10% year over year to $7 million.
Milacron reported cash and cash equivalents of $150.3 million at the end of the reported quarter, down from $187.9 million at the end of 2017. The company generated $56 million of cash from operating activities during the nine-month period ended Sep 30, 2018, compared with $7 million reported in the comparable period last year. Long-term debt was $853 million as of Sep 30, 2018, compared with $926 million as of Dec 31, 2017.
Milacron projects sales growth at 2% for 2018, including an anticipated benefit of 1% from foreign currency translation. The company’s previous sales growth guidance was in the range of 2% to 4% for 2018. The company revised adjusted EBITDA guidance to $229-$231 million for the full year from the prior outlook of $237-$240 million. The company stated that the lowered guidance can primarily be attributed to the impact of tariffs on industry orders.
Share Price Performance
Shares of Milacron have dropped around 18% in the past year, compared with the industry’s decline of 19%.
Zacks Rank & Key Picks
Milacron currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the same industry include Donaldson Company, Inc. DCI, Enersys ENS and Tetra Tech, Inc. TTEK. Donaldson Company and Enersys sport a Zacks Rank #1 (Strong buy), while Tetra Tech carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Donaldson Company has a long-term earnings growth rate of 11.5%. The stock has gained around 8% in a year’s time.
Enersys has a long-term earnings growth rate of 10%. The company’s shares have gained 6% over the past year.
Tetra Tech has a long-term earnings growth rate of 14%. Its shares have rallied 35% in the past year.
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