W.R. Grace & Co. (GRA) Tops Q4 EPS by 10c, Revenues Beat; Offers FY19 EPS Guidance Above Consensus

W.R. Grace & Co. (NYSE: GRA) reported Q4 EPS of $1.14, $0.10 better than the analyst estimate of $1.04. Revenue for the quarter came in at $520 million versus the consensus estimate of $498.42 million.

“I’m pleased with our strong 2018 performance. Our team delivered double-digit sales and earnings growth, and significantly improved our ability to consistently deliver profitable growth,” said Hudson La Force, Grace's President and Chief Executive Officer. “Our recent investments to accelerate growth and extend our competitive advantages are producing results. I'm upbeat about 2019 and expect another year of solid demand for our high-value technologies with expanding margins and double-digit Adjusted EPS growth.”

• Sales increased 13.2% to $520.0 million, up 14.3% on constant currency. Sales growth was driven by higher sales volumes (6.1%) and improved pricing (2.1%). The 2Q18 polyolefin catalysts acquisition contributed 6.1% to sales growth in the quarter.
• Net income was $69.1 million and Diluted EPS was $1.03 per share.
• Adjusted EBIT increased 3.2% to $118.8 million. Adjusted EBIT margin was down 220 bps.
• During the fourth quarter when market concerns increased about the pace of 2019 global growth, we proactively reduced production rates for the quarter to ensure inventory levels were appropriate in the event demand weakness developed. We are not seeing any significant change in our customer demand and are well positioned for solid growth in 2019. We took advantage of this opportunity to use some of the available production time to run product trials in our specialty catalysts plants. Together, these actions reduced 4Q18 gross margins by 200 bps, primarily from the effect of lower capitalized overhead costs in inventory at year-end.
• In 4Q18, we recorded a restructuring and repositioning charge of $10.1 million related to closing two smaller manufacturing plants in the quarter. Activities at these plants have been moved to larger, more cost-effective plants as part of our strategy to capture synergies from our recent catalysts acquisitions.
• The 2018 income tax provision reflects our current assessment of the effects of changes in U.S. tax law under the Tax Cuts and Jobs Act of 2017 and may be subject to further adjustment before we issue the 10-K. Any further adjustment for this matter will not affect Adjusted EPS.

GUIDANCE:

W.R. Grace & Co. sees FY2019 EPS of $4.53-$4.63, versus the consensus of $4.49.

For earnings history and earnings-related data on W.R. Grace & Co. (GRA) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• SVB & T Corporation (SVBT) Tops Q2 EPS by 275c
• Newton Golf Company (NWTG) Reports Q2 Loss of $0.49