Actuant (ATU) Misses Q3 EPS by 1c, Lowers FY EPS Guidance

Actuant (NYSE: ATU) reported Q3 EPS of $0.32, $0.01 worse than the analyst estimate of $0.33. Revenue for the quarter came in at $295.4 million versus the consensus estimate of $294 million.

GUIDANCE:

Actuant sees FY2017 EPS of $0.82-$0.87, versus the consensus of $0.99. FY revenue is seen at $1.08 billion to $1.09 billion vs estimate of $1.09 billion.

• Baker continued, “As we enter the final quarter of the fiscal year, we remain confident in our strategies and execution on growth initiatives. We are encouraged by the progress across the organization in sales effectiveness and lean revitalization actions. Unfortunately, these advancements are being more than negated by the impact of the prolonged industry downturn within the energy business. I believe that the long-term fundamentals of the maintenance driven portion of the business remain attractive with its market leading position in a highly fragmented and profitable niche.
• We are committed to taking the actions necessary to right size the maintenance operation for the current environment and to maximize available opportunities in the interim. In addition to these restructuring activities, we are taking action on the most impactful portfolio management steps including actively pursuing strategic alternatives for the offshore mooring operation. By extensively limiting our upstream, offshore activity tied predominately to exploration and well development, we believe we will buffer the level of cyclicality and improve long term profitability and cash flow.
• Given the above factors, we now expect full year sales to be within the range of $1.080-1.090 billion. We currently expect fiscal 2017 adjusted EPS to be $0.82-0.87, down from $1.10-1.20 as lower energy maintenance volumes and unfavorable segment sales mix weigh on margins. Free cash flow is projected to be in the $65-70 million range in fiscal 2017, down from the previous range of $85-95 million, yet represents conversion of nearly 125% of adjusted net earnings.
• All guidance excludes restructuring and transition costs, one-time income tax benefits, as well as the impact of potential future portfolio management actions, acquisitions and share repurchases.
• In summary, our near term focus remains on controlling what we can by improving our commercial effectiveness and speed to market, enhancing our lean execution, managing our cost base to current market conditions, and completing critical portfolio management actions. We believe that these initiatives will position the company successfully through cycles regardless of market conditions.”

For earnings history and earnings-related data on Actuant (ATU) click here.

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