W.R. Grace & Co. (GRA) Tops Q4 EPS by 5c, Revenues Beat; Provides FY20 EPS Guidance

W.R. Grace & Co. (NYSE: GRA) reported Q4 EPS of $1.31, $0.05 better than the analyst estimate of $1.26. Revenue for the quarter came in at $504.5 million versus the consensus estimate of $503.64 million.

• 2019 sales increased 1.3% to $1.96 billion, up 3.0% on constant currency; the previously disclosed discrete items reduced sales by $36 million (-1.8%)
• 2019 Diluted EPS of $1.89, down $0.60 primarily due to charges related to annual pension mark-to-market adjustments and legacy liabilities
• 2019 Adjusted EPS increased 5.8% to $4.38
• Strong cash flow funded $102 million of dividends and share repurchases

“Our team delivered solid results in a challenging year. We grew sales, adjusted earnings and cash flow, returned $102 million to shareholders and reduced our net leverage to below 3.0x following our most recent acquisitions,” said Hudson La Force, Grace’s President and Chief Executive Officer. “For 2020, we expect slow sales growth given the uncertain global manufacturing environment but stronger earnings and cash flow growth. These headwinds are temporary and do not change our strategic direction or my conviction about the earnings power of our businesses.”

GUIDANCE:

W.R. Grace & Co. sees FY2020 EPS of $4.73-$4.91, versus the consensus of $4.83.

• Sales growth of 0% to 3% reflecting a weak global manufacturing environment and the potential effects of the coronavirus
• Adjusted EBIT of $500 to $520 million, up 6% to 10% and in line with our 2020 Adjusted EBIT preview provided with 3Q19 results in October, updated to reflect potential effects of the coronavirus
• Adjusted EPS of $4.73 to $4.91 per share, up 8% to 12%
• Annual cash dividend of $1.20 per share, up 11%

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

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