Virco (VIRC) Q3 Earnings & Sales Beat Estimates, Stock Up
Virco Mfg. Corporation VIRC reported impressive third-quarter fiscal 2024 (ended Oct 31) results, with earnings and net sales surpassing the Zacks Consensus Estimate. Following the results, VIRC's shares rallied 21.4% during the trading session on Dec 8.
Robust funding across several domains, including state and local funding for public schools, federal support for particular earmarked activities, such as pre-K programs and expanded foodservice, as well as continued growth in support for charter schools and private/parochial schools, has been supporting in-person education.
Backed by the strong result, Virco’s board of directors has re-instated a quarterly dividend of 2 cents per share, payable on Jan 10, 2024, to shareholders of record as of Dec 22, 2023. In addition, it has authorized an open-market share repurchase program of up to $5,000,000.
Virco’s president, Doug Virtue, stated, “The fact that we’ve been able to support a 76% expansion in business activity from the depths of the pandemic, without the need for additional debt or capital, is a direct reflection of the inherent efficiencies of our domestically based business model, which includes a full suite of services from project layout and design to final installation and clean-up.”
Quarter in Detail
Virco reported earnings of 62 cents per share, which topped the consensus mark of 39 cents by 59% and increased 29.2% from the year-ago level of 48 cents per share.
Virco Manufacturing Corporation Price, Consensus and EPS Surprise
Virco Manufacturing Corporation price-consensus-eps-surprise-chart | Virco Manufacturing Corporation Quote
Net sales of $84.3 million topped the consensus mark of $81 million by 3.6%. The top line grew 8.9% from the prior-year quarter’s levels of $77.4 million. The increase was attributable to an improvement in on-time deliveries during the traditional summer season and increased order rates.
During the fiscal third quarter, VIRC experienced a 25% increase in orders compared with the prior-year quarter. The backlog of unshipped sales orders on Oct 31, 2023, declined to $42.5 million compared with $44.8 million in the prior year.
In the fiscal third quarter, the gross margin increased 560 basis points from the prior-year quarter’s levels to 45.4%. The upside was backed by solid pricing, relatively stable commodity costs and an increase in sales, which included Virco full service.
SG&A, as a percent of sales, improved 27.9% year over year to $28.4 million. Operating income of $14.7 million rose 67.1% from $8.8 million reported in the prior-year quarter.
Financials
As of Oct 31, the company had $4.89 million cash, up from $1.06 million at the fiscal 2023-end. Long-term debt, less current portion, was $7.95 million compared with $14.38 million reported at the fiscal 2023-end.
Zacks Rank & Some Consumer Discretionary Releases
Virco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Leggett & Platt, Inc. LEG reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and bottom lines declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Strategic Education, Inc. or SEI STRA reported impressive results for third-quarter 2023. Its quarterly earnings and revenues topped the respective Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in U.S. Higher Education, driven significantly by employer-affiliated enrollment, strong growth in Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand, drove the result.
Adtalem Global Education Inc. ATGE reported impressive results for first-quarter fiscal 2024. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given solid enrollment growth and strategic initiatives.
The company's accelerated performance across five operational pillars highlights its market-leading scale and healthcare focus. The firm also raised its fiscal 2024 guidance. With 80,000 students and 300,000 alumni, ATGE is well-equipped to address critical healthcare provider shortages.
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