TPI Composites, Inc. (TPIC) Tops Q3 EPS by 33c, Revenues Miss; Offers FY18 & FY19 EPS/Revenue Guidance

November 7, 2018 4:24 PM

TPI Composites, Inc. (NASDAQ: TPIC) reported Q3 EPS of $0.26, $0.33 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $255 million versus the consensus estimate of $256.83 million.

“We delivered solid operational and financial performance in the third quarter in which we exceeded our Adjusted EBITDA target,” said Steven Lockard, TPI Composites’ President and Chief Executive Officer. “During the third quarter, we expanded an existing multiyear supply agreement with Vestas for two manufacturing lines in our new manufacturing hub in Matamoros, Mexico; we expanded a supply agreement with GE in Mexico with GE agreeing to add two more production lines, transition three of the existing lines and extend the contract by two years; and finally, GE agreed to transition to a larger blade model in our Iowa plant in early 2019. We continue to strengthen our relationships with our customers with the additions of new lines and transitions to larger blade models to continue to drive down the levelized cost of wind energy. On the transportation side of our business, today we are announcing an investment of approximately $11.5 million in 2019 to develop a highly automated pilot manufacturing line to further develop our technology, create defensible product and process IP and to demonstrate our capability to manufacture composite components cost-effectively at automotive volume rates for the electrical vehicle market. So far this year, with the new agreements, amendments and transitions, we have increased our lines under long-term supply agreements by a net of 9 up to 50 and increased our potential revenue under contract by a net of $2.6 billion.”

“Our customers continue to invest with TPI through the addition of new outsourced blade capacity as well as increased transitions, both of which have impacted our near-term profitability but position us well for long-term growth. Our Adjusted EBITDA guidance for 2018 remains the same as we provided during our Q2 earnings call of $65 million to $70 million. For 2019, our guidance for net sales is $1.5 billion to $1.6 billion, up from our original target range of $1.3 billion to $1.5 billion. Our Adjusted EBITDA guidance is $120 million to $130 million, down from our original target range of $140 million to $150 million, primarily due to our updated forecast of eight more lines in transition, all of which relate to the recent GE amendments, and nine more lines in startup during 2019 than our original forecast. We believe these additional investments in increased startups and transitions position us well for our goal of doubling our wind related sales by 2021. We estimate that the startup costs to be incurred during 2018 and 2019 relating to lines under supply agreements signed as of today provide additional potential revenue under contract of approximately $3.8 billion over the terms of those contracts while the estimated transition costs to be incurred during 2018 and 2019 related to lines under supply agreements signed as of today are expected to provide incremental potential revenue of approximately $500 million. For 2020, we are preliminarily targeting net sales in the range of $1.7 billion to $1.9 billion and Adjusted EBITDA of approximately 10% or a range of $170 million to $190 million,” concluded Mr. Lockard.

GUIDANCE:

TPI Composites, Inc. sees FY2018 EPS of $0.32-$0.39, versus the consensus of $0.14. TPI Composites, Inc. sees FY2018 revenue of $1-1.05 billion, versus the consensus of $1.03 billion.

TPI Composites, Inc. sees FY2018 EPS of $1.24-$1.35, versus the consensus of $1.85. TPI Composites, Inc. sees FY2018 revenue of $1.5-1.6 billion, versus the consensus of $1.37 billion.

For earnings history and earnings-related data on TPI Composites, Inc. (TPIC) click here.

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