Core-Mark Holding (CORE) Tops Q3 EPS by 11c, Revenues Beat; Raises FY20 EPS/Revenue Guidance Above Consensus

Core-Mark Holding (NASDAQ: CORE) reported Q3 EPS of $0.60, $0.11 better than the analyst estimate of $0.49. Revenue for the quarter came in at $4.5 billion versus the consensus estimate of $4.34 billion.

• Third Quarter Net Sales Increased 1.8% to $4.50 Billion
• Reduced operating expenses by 5.9% to $200.2 Million
• Net Income of $23.0 Million, Diluted EPS at $0.51 per share
• Adjusted EBITDA of $59.3 Million(1) versus $59.2 Million Last Year
• Increases Dividend by 8% to $0.13 per share quarterly
• Raises 2020 Guidance for Diluted EPS to $1.17 and Adjusted EBITDA to $188 Million at Midpoint

“Our results for the third quarter demonstrate Core-Mark’s resiliency in what remains a challenging business environment heavily impacted by the pandemic,” said Scott E. McPherson, President and Chief Executive Officer. “In a year where sales mix and margins have faced tremendous pressure, we have delivered year-to-date growth in earnings through a disciplined approach to cost control and productivity. Equal in importance to our financial performance has been the company’s commitment to advance key programs and technologies enhancing our customer value proposition. Lastly, I am grateful to our employees for their continued hard work and dedication and want to thank our customers and vendors for their commitment, cooperation and support.”

GUIDANCE:

Core-Mark Holding sees FY2020 EPS of $1.62-$1.69, versus the consensus of $1.55. Core-Mark Holding sees FY2020 revenue of $16.8-16.9 billion, versus the consensus of $16.67 billion.

The Company has increased its 2020 guidance for net sales, diluted earnings per share and adjusted EBITDA. Net sales are expected to be between $16.8 billion and $16.9 billion, compared with prior guidance of $16.5 billion to $16.8 billion. Adjusted EBITDA is now expected to be between $186 million and $190 million, compared with prior guidance of $173 million to $183 million. The revised guidance ranges anticipate year-over-year carton declines in the 0% to 3% range in the fourth quarter of 2020 and continued impact from COVID-19 on non-cigarette sales and margins. Guidance also assumes full year inventory holding gains in the range of $26 to $27 million. The guidance ranges above are based on current expectations and do not contemplate significant changes in the impact of COVID-19 or economic conditions on the Company’s business.

Diluted EPS for the full year is now expected to be between $1.13 and $1.20 compared to prior guidance of $0.90 and $1.06. Diluted EPS, excluding LIFO expense, is expected to be between $1.62 and $1.69 compared to prior guidance of $1.42 to $1.59. In terms of other key assumptions, LIFO expense is now expected to be $30 million compared with $32 million in prior guidance, a 27% annual tax rate compared to 26% in prior guidance and the estimate for fully diluted shares outstanding remains unchanged at 45.3 million. Capital expenditures for 2020 are expected to be approximately $35 million, consistent with prior guidance. The Company’s guidance assumes no new acquisitions or large customer market share gains.

For earnings history and earnings-related data on Core-Mark Holding (CORE) click here.

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