Anixter Int'l (AXE) Tops Q4 EPS by 12c

Anixter Int'l (NYSE: AXE) reported Q4 EPS of $1.41, $0.12 better than the analyst estimate of $1.29. Revenue for the quarter came in at $2 billion versus the consensus estimate of $1.99 billion.

Business Outlook

"Full year 2017 organic sales growth on a per day basis of 3.5% was near the high end of our initial 2017 range and included growth in all segments and all geographies. We were especially pleased to deliver double digit organic sales growth in our UPS segment and in our EMEA and Emerging Markets geographies," commented Bill Galvin, President and Chief Operating Officer. "Looking ahead, we are optimistic regarding our business based on multiple indicators. We experienced strong momentum in the fourth quarter, including a recovery in large capital project activity in our EES business, an improving backlog, and strong pipeline activity. The external environment remains favorable in all of our major geographies, reflected by broad favorable economic growth indicators across global markets. Additionally, we see the recent tax reform legislation as a potential catalyst for our customers to increase capital expenditures."

We estimate the following impacts as a result of the recently passed Tax Cuts and Jobs Act:

• $35.6 million expense recorded in the fourth quarter 2017 related to the impact of tax legislation which includes the following;
  • $50.0 million unfavorable transition tax on deferred foreign income, to be paid over 8 years; and
  • $14.4 million favorable rate change impact of net deferred tax liability
• A 2018 effective tax rate in the 28.5% - 29.5% range.

For the full year 2018, we estimate organic sales growth of 2.0 - 5.0%, cash flow from operations of $180 - $200 million and capital expenditures of $60 - $70 million. For the first quarter of 2018, we estimate organic sales growth in the 2.0 - 3.0% range.

For earnings history and earnings-related data on Anixter Int'l (AXE) click here.

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