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Milacron (MCRN) Q4 Earnings & Revenues Surpass Estimates

Zacks Equity Research

Milacron Holdings Corp. MCRN delivered adjusted earnings per share of 48 cents in the fourth quarter, surpassing the Zacks Consensus Estimate of 37 cents. On a year-over-year basis, earnings declined 18.6%.
 
Including one-time items, the company reported earnings per share of 8 cents in the fourth quarter, improving 60% from the year-ago quarter’s figure of 5 cents.
 
Operational Update

Milacron’s revenues fell 4.2% year over year to $311.4 million during the fourth quarter. Revenues beat the Zacks Consensus Estimate of $307 million. Excluding unfavorable effects of currency movements, revenues decreased 1.6% from the prior-year quarter. New orders in the reported quarter declined 13.3% year over year to $274.2 million.

Cost of sales during the fourth quarter went down 4.6% year over year to $228 million from the prior-year quarter. Gross profit decreased 2% year over year to $84 million. Gross margin came in at 27% during the fourth quarter compared with 26% recorded in the year-ago quarter.

Selling, general and administrative expenses declined 16% year over year to $53.3 million. Adjusted EBITDA went down 11% to $53.8 million in the reported quarter from $60.4 million in the prior-year quarter. Adjusted EBITDA margin decreased 130 bps to 17.3% in the fourth quarter.

Milacron Holdings Corp. Price, Consensus and EPS Surprise

 

Milacron Holdings Corp. Price, Consensus and EPS Surprise | Milacron Holdings Corp. Quote

Segmental Results
 
Advanced Plastic Processing Technologies: Net sales declined 6.5% year over year to $178 million. Excluding $4.8 million of unfavorable effects of currency movements, sales decreased 3.9% from the prior-year quarter. Adjusted EBITDA was up 5% year over year to $27.1 million.
 
Melt Delivery and Control Systems: Net sales edged down 1.3% year over year to $102.3 million. Excluding unfavorable effects of currency movements of $2.8 million, sales increased 1.4% from the prior-year period. Adjusted EBITDA declined 22% year over year to $25.2 million.
 
Fluid Technologies: Sales for the fourth quarter were $31.1 million, flat compared with the prior-year quarter. Sales improved 2.9% from the year-ago period, excluding $0.8 million of unfavorable impacts of currency movements. Adjusted EBITDA was $7.2 million, down from $7.4 million in the year-ago quarter.

Financial Update
 
Milacron reported cash and cash equivalents of $184 million at the end of 2018, down from $188 million at the end of 2017. The company generated $124.3 million of cash in 2018, compared with $110.4 million in 2017. Long-term debt was $829 million as of Dec 31, 2018, compared with $916 million as of Dec 31, 2017.

2018 Results

Milacron reported adjusted earnings per share of $1.78 in 2018, down 1.7% from $1.81 in the prior year. Earnings beat the Zacks Consensus Estimate of $1.67. Including one-time items, the company reported earnings per share of 58 cents compared with the year-ago quarter’s figure of 2 cents.

Sales increased 2% year over year to $1.26 billion in 2018. Excluding the favorable impact of currency movement, sales for the year increased 1.2% from the 2017 figure. The top line beat the Zacks Consensus Estimate of $1.25 billion.

Outlook
 
Milacron projects sales to decline 3-4% in 2019, including an anticipated headwind of 1% from foreign currency translation. Adjusted EBITDA margin is forecasted to be 17.5-18%. Free cash flow is expected to be $100-$110 million.

Shares of Milacron have dipped around 37.6% in the past year compared with the industry’s decline of 17.1%.

 



Zacks Rank and Other Stocks to Consider

Milacron currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Industrial Products sector are Axon Enterprise, Inc AAXN, Alarm.com Holdings, Inc. ALRM and Ennis, Inc. EBF, each sporting Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axon has an expected earnings growth rate of 14.5% for 2019. The company’s shares have rallied 94.1% in the past year.

Alarm.com has an expected earnings growth rate of 7.8% for 2019.  The stock has grown 65.1% in the past year.

Ennis has an expected earnings growth rate of 13.9% for 2019. Its shares have gained 4.5% in the past year.

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