Note: EPS may not be comparable

Sypris Solutions (NASDAQ: SYPR) reported Q4 EPS of ($0.06), $0.03 worse than the analyst estimate of ($0.03). Revenue for the quarter came in at $21.5 million versus the consensus estimate of $21.05 million.

Outlook

Commenting on the future, Mr. Gill added, “Our markets are poised to provide Sypris with the opportunity for healthy, double-digit revenue growth during 2018. New contract awards and market expansion are expected to occur in each of our targeted markets for energy, commercial vehicle and aerospace and defense products.

“Third-party forecasts for the Class 8 commercial vehicle market show production up over 30% in 2018 as compared to 2017. The oil and gas pipeline market continues to benefit from increased demand and higher oil prices. The full fiscal year 2018 is also forecast to benefit from significantly lower fixed overhead and production costs at Sypris Technologies, as well as from the elimination of severance and other expenses. Additionally, the National Defense Authorization Act for Fiscal Year 2018 provides nearly $700 billion in funding for the U.S. Department of Defense, which is expected to support program growth and market expansion during the coming year for Aerospace and Defense participants.

“Our outlook for revenue for 2018 is in the range of $90.0-$96.0 million with first-half revenue comprising $43.0-$45.0 million of the total, primarily reflecting the impact of delayed electronic component receipts. The second half of 2018 is expected to benefit from a normalization of these receipts and new program launches, resulting in revenue in the range of $47.0-$51.0 million.

We expect to see further meaningful improvements in gross margin to 15%-17% for the year, with sequential improvements from the first to second half periods. We expect selling, general and administrative spending to decline in 2018 from the prior year, and to be in the range of 13.0%-14.5% of revenue for the full year, subject to our actual top-line performance. The net result is that we expect to return to profitability on a consolidated basis for 2018.”

For earnings history and earnings-related data on Sypris Solutions (SYPR) click here.