Ferro Corp. (FOE) Misses Q2 EPS by 4c, Guides Below Street Views

Ferro Corp. (NYSE: FOE) reported Q2 EPS of $0.20, $0.04 worse than the analyst estimate of $0.24. Revenue for the quarter came in at $268.2 million versus the consensus estimate of $283.48 million.

Ferro Corp. sees FY2015 EPS of $0.82-$0.87, versus the consensus of $0.95.

Peter Thomas, Chairman, President and Chief Executive Officer, commented, “We continue to make progress on creating value through organic and inorganic sales growth and by improving our profit margins. For the quarter, value-added sales increased by 5% on a constant currency basis, aided by the Vetriceramici acquisition and organic growth in the Pigments, Powders, and Oxides and Performance Colors and Glass segments.

“In addition, we continue to drive improved profitability, with our gross profit margin increasing by approximately 250 basis points over the prior year to 30.3% and our adjusted EBITDA margin improving by approximately 75 basis points to 14.5%. Adjusted operating profit, on a constant currency basis, improved by 16% to $29 million. Adjusted for currency, we were able to achieve sales growth and profitability improvement despite continued economic weakness in certain regions where we conduct business, including in Asia and the Middle East and North Africa (“MENA”) region.”

Mr. Thomas continued, “In early July, we completed our €149 million acquisition of Nubiola, a worldwide producer of specialty inorganic pigments and the world’s largest producer of Ultramarine Blue. The acquisition substantially improves our position in inorganic pigments by expanding our product portfolio and geographic reach. We expect the transaction to add approximately $55 million - $60 million to our sales in the second half of 2015 and to be immediately accretive to earnings. Meanwhile, we are actively pursuing additional business opportunities to further strengthen our position in glass-based coatings and color solutions for industrial applications.

“Looking ahead, we anticipate economic conditions will continue to be challenging in certain regions, including Asia and in certain countries in Eastern Europe, including Russia and Ukraine. We expect this weakness to be offset by modest economic growth in the United States and Western Europe and an improving outlook for MENA. Despite the challenging economic conditions, particularly for our tile business, we expect to maintain profit margins, and will continue to execute against our strategy of pursuing value-creating growth while being keenly focused on cost controls

For earnings history and earnings-related data on Ferro Corp. (FOE) click here.

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