Mueller Water Products, Inc. (MWA) Tops Q3 EPS by 2c

Mueller Water Products, Inc. (NYSE: MWA) reported Q3 EPS of $0.11, $0.02 better than the analyst estimate of $0.09. Revenue for the quarter came in at $228.5 million versus the consensus estimate of $210.54 million.

Fourth Quarter and Full-Year 2020 Outlook:

As expected, during the third quarter the majority of Mueller Water Product's customers focused on maintaining essential services and completing existing projects, where possible. The level of repair and replacement and project activity varied greatly depending on the effects of shelter-in-place orders and social distancing practices. The Company continues to expect delays in some ongoing projects and approvals of new projects, which will impact its project-related areas of business, principally metering, leak detection and specialty valve products.

The residential construction end market, which made up approximately 25 to 30 percent of 2019 consolidated net sales, improved at a faster pace than expected during the third quarter, following a sharp decrease in activity in many regions in the first half of the quarter. With mortgage rates at historic lows, relatively low lot inventories, pent-up demand and supportive demographic trends, the Company anticipates that residential construction activity could continue to improve. However, the pace of the recovery will continue to vary greatly and is highly dependent on the COVID-19 pandemic.

Although the Company withdrew the previously announced full-year 2020 financial guidance, which had been issued on February 4, 2020, it is providing guidance for certain financial metrics for its fourth quarter and full-year ended September 30, 2020.

Mueller Water Products currently anticipates that consolidated net sales for its 2020 fourth quarter will be between flat and 5 percent lower as compared with the prior year quarter. As a reminder, given the Company’s fixed cost structure, especially for its core products, the decrease in volumes will lead to a greater decline in adjusted EBITDA for the quarter. The Company does expect its adjusted EBITDA conversion margin to improve relative to the third quarter. As a result, adjusted EBITDA is anticipated to be between flat and 10 percent lower as compared with the prior year quarter. Additionally, the Company expects to generate positive free cash flow during the fourth quarter and increase the cash on its balance sheet at the end of September 2020.

The Company is refining its guidance for certain financial metrics for the full-year 2020:

• Net interest expense between $25.5 million and $26.0 million.
• Effective income tax rate between 23 percent and 24 percent.
• Depreciation and amortization between $57 million and $58 million.
• Capital expenditures between $71 million and $75 million.

For earnings history and earnings-related data on Mueller Water Products, Inc. (MWA) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Blackhawk Network (HAWK) Reports Q2 Loss of $0.07; Offers Guidance
• HeartCore Enterprises, Inc. (HTCR) Misses Q2 EPS by 185c