Graham (GHM) Tops Q3 EPS by 2c

Graham (NYSE: GHM) reported Q3 EPS of $0.13, $0.02 better than the analyst estimate of $0.11. Revenue for the quarter came in at $17.3 million versus the consensus estimate of $22.77 million.

Orders during the third quarter of fiscal 2016 were $22.3 million, net of a $3.3 million cancellation from backlog, relatively unchanged from the prior-year period. Gross orders were $25.6 million. Orders from the power and chemical/petrochemical markets were up $5.3 million and $1.3 million, respectively. Net of the $3.3 million cancelled order, refining market orders were down $3.1 million compared with the prior-year quarter. Other commercial and industrial orders were down $3.8 million. When compared with the trailing second quarter of fiscal 2016, orders increased $1.7 million, or 8%. There was one order on hold as of December 31, 2015, valued at $10.1 million.

Orders from U.S. customers were $9.5 million, net of the $3.3 million cancelled order, representing 42% of total orders received during the third quarter of fiscal 2016. Orders from international markets accounted for $12.8 million.

Graham expects that the balance between domestic and international orders will continue to be variable between quarters, but that in the long run orders will be relatively balanced between these geographic markets.

The Company’s backlog grew sequentially to $113.2 million at December 31, 2015, compared with $108.1 million at September 30, 2015, and $113.8 million at March 31, 2015. Approximately 24% of backlog was for refinery projects, 13% was for chemical and petrochemical projects and 15% was for power projects, including nuclear. Approximately 44% of backlog was for U.S. Navy projects and 4% was for other industrial or commercial applications.

Approximately 45% to 50% of orders currently in backlog are expected to be converted to sales within the next 12 months, approximately 5% to 10% are expected to be converted between the next 12 to 24 months, and approximately 40% to 45% are expected to be converted beyond 24 months.

Outlook:

Graham reaffirmed FY2016 guidance.

For earnings history and earnings-related data on Graham (GHM) click here.

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