Sypris Solutions (NASDAQ: SYPR) reported Q1 EPS of ($0.09), $0.02 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $19.94 million versus the consensus estimate of $20.35 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, automotive, commercial vehicle and aerospace and defense products.

“Third-party forecasts for the Class 8 commercial vehicle market indicate production will be up over 30% in 2018 compared to 2017. The energy market continues to benefit from increased demand and higher oil prices. 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 for Aerospace and Defense participants during the coming year. And from a cost standpoint, we expect to benefit from significantly lower fixed overhead and production costs at Sypris Technologies, as well as from the elimination of severance and other expenses.

“As a result, we are pleased to reaffirm our guidance for 2018, with full-year revenue and gross margin expected to be in the range of $90.0-$96.0 million and 15.0%-17.0%, respectively. Revenue and gross margin for the first six months of 2018 are forecast to be in the range of $43.0-$45.0 million and 13.0%-15.0%, respectively, while revenue and gross margin for the second half of the year are forecast to be in the range of $47.0-$51.0 million and 16.0%-18.0%, respectively.

“Taking a closer look at the first half of 2018, we are forecasting consolidated revenue and gross margin for the second quarter of $23.0-$25.0 million and 16.0%-18.0%, respectively. Sypris Technologies is expected to generate revenue and gross margin of $16.0-$17.0 million and 18.0%-21.0%, respectively, for the quarter, while revenue and gross margin for Sypris Electronics is forecast to be in the range of $7.0-$8.0 million and 10.0%-12.0%, respectively.

“We expect selling, general and administrative spending to be in the range of 13.0%-14.5% of revenue for the full year, subject to 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.