Colfax Corp. (CFX) Tops Q3 EPS by 1c, Revenues Miss; Lifts FY18 EPS Mid-Point Outlook

Colfax Corp. (NYSE: CFX) reported Q3 EPS of $0.54, $0.01 better than the analyst estimate of $0.53. Revenue for the quarter came in at $875.37 million versus the consensus estimate of $891.11 million.

• Reported net income from continuing operations per diluted share of $0.29 versus $0.35 in the prior year quarter, and achieved adjusted net income per share of $0.54 versus $0.46
• Posted 10% organic growth in Fabrication Technology business
• Sequentially strengthened adjusted operating margins by 250 bps in Air & Gas Handling business Recently completed three complementary acquisitions

“Third quarter financial performance was in-line with our expectations,” said Matt Trerotola, Colfax President and CEO. “Fabrication Technology organic sales growth accelerated for the seventh quarter in a row, and we are driving additional price actions to cover inflation. Air & Gas Handling orders returned to organic growth in the quarter, and its operating margins expanded sequentially from the second quarter as expected due to cost actions and improved project pricing.”

During the third quarter the Company acquired Advanced Combustion Inc. (ACI), a leading global provider of heaters for cold-weather mines and ACH Equipos Ltda. (ACH) the leading servicer of ventilation systems in the Chilean mining industry. These businesses are included within the Company’s Air & Gas Handling segment. The ACI and ACH acquisitions are expected to contribute annual revenues in excess of $30 million. In early October, the Company completed its previously-announced acquisition of Gas Control Equipment (GCE) for its Fabrication Technology business.

“The ACI and ACH acquisitions expand our technology and service offering for mining ventilation where we have a clearly differentiated offering for customers,” said Mr. Trerotola. “GCE expands our presence in specialty gas applications and combining GCE with Fabrication Technology’s global presence and continuous improvement culture will drive both businesses to achieve new heights of success. We welcome the new associates to the Colfax team and look forward to their contributions to our growth.”

Following its third quarter performance, Colfax revised its adjusted earnings per share outlook for the year from $2.15-$2.30 to $2.20-$2.30.

“Colfax is expected to end the year with adjusted earnings per share growth of 26% or more,” said Mr. Trerotola. “We expect a strong performance in the fourth quarter, led by continued Fabrication Technology business growth and sequential margin improvement, expanded Air & Gas Handling margins, and further benefits from our restructuring actions.”

GUIDANCE:

Colfax Corp. sees FY2018 EPS of $2.20-$2.30, versus the consensus of $2.25.

For earnings history and earnings-related data on Colfax Corp. (CFX) click here.

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