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Milacron's (MCRN) Q1 Earnings Beat, Revenues Miss Estimates

Zacks Equity Research

Milacron Holdings Corp. MCRN delivered adjusted earnings per share of 27 cents in the first quarter, surpassing the Zacks Consensus Estimate of 26 cents. On a year-over-year basis, earnings plunged 30.8%.

Including one-time items, the company reported earnings per share of 13 cents in the reported quarter, jumping 44.4% from the year-ago quarter’s reported figure of 9 cents.

Operational Update

Milacron’s revenues fell 13.9% year over year to $248.7 million during the first quarter. Revenues also missed the Zacks Consensus Estimate of $280 million. Excluding unfavorable impact of currency movements, organic revenues decreased 10.5% from the prior-year quarter’s reported tally. New orders in the reported quarter declined 10.8% year over year to $275.3 million.

Cost of sales during the January-March quarter went down 13.2% year over year to $164 million. Gross profit decreased 15% year over year to $84.8 million. Gross margin came in at 34.1% during the first quarter compared with the year-ago quarter’s 34.6%.

Selling, general and administrative expenses slipped 13% year over year to $54 million. Adjusted EBITDA went down 23.5% to $41.0 million in the first quarter from $53.6 million in the prior-year quarter. Adjusted EBITDA margin shrunk 210 bps to 16.5% in the 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 15% year over year to $119.4 million. Excluding $3.8 million of unfavorable impact of currency movements, sales dropped 12.2% from the prior-year quarter. Adjusted EBITDA was down 9.3% year over year to $14.7 million.
 
Melt Delivery and Control Systems: Net sales dipped 14% year over year to $100 million. Excluding unfavorable impact of currency movements of $4.6 million, sales decreased 10.2% from the prior-year period. Adjusted EBITDA plummeted 32.5% year over year to $25.8 million.
 
Fluid Technologies: Sales for the reported quarter slipped 8.4% year over year to $29.3 million. Sales dipped 3.8% from the year-ago period, excluding $1.5 million of unfavorable currency-movement impact. Adjusted EBITDA was $6.4 million, down from the prior year’s $7.1 million.

Financial Update

Milacron reported cash and cash equivalents of $150 million at the end of the first quarter, down from $184 million witnessed at the end of 2018. Net cash used in operating activities were $4.6 million during the three-month period ended Mar 31, 2019, compared with cash inflow of $11.7 million reported in the comparable period last year.  Long-term debt was $824 million as of Mar 31, 2019, compared with $829 million as of Dec 31, 2018.

Shares of Milacron have dipped around 21.3% in the past year compared with the industry’s decline of 4.9%.



Zacks Rank and Key Picks

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

A few better-ranked stocks in the Industrial Products sector are DMC Global Inc. BOOM, Lawson Products, Inc. LAWS and DXP Enterprises, Inc. DXPE, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DMC Global has an estimated earnings growth rate of 77.3% for the ongoing year. The company’s shares have soared 80.3%, in the past year.

Lawson Products has an impressive expected earnings growth rate of 102.5% for the current year. The stock has appreciated 44.4% in a year’s time.

DXP Enterprises has a projected earnings growth rate of 21.6% for 2019. The company’s shares have gained 15.7%, over the past year.

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