Milacron (MCRN) Q4 Earnings & Revenues Surpass Estimates

Milacron Holdings Corp. (NYSE:MCRN) delivered adjusted earnings per share of 48 cents in the fourth quarter, surpassing the Zacks Consensus Estimate of 37 cents. On a year-over-year basis, earnings declined 18.6%.

Including one-time items, the company reported earnings per share of 8 cents in the fourth quarter, improving 60% from the year-ago quarter’s figure of 5 cents.

Operational Update

Milacron’s revenues fell 4.2% year over year to $311.4 million during the fourth quarter. Revenues beat the Zacks Consensus Estimate of $307 million. Excluding unfavorable effects of currency movements, revenues decreased 1.6% from the prior-year quarter. New orders in the reported quarter declined 13.3% year over year to $274.2 million.

Cost of sales during the fourth quarter went down 4.6% year over year to $228 million from the prior-year quarter. Gross profit decreased 2% year over year to $84 million. Gross margin came in at 27% during the fourth quarter compared with 26% recorded in the year-ago quarter.

Selling, general and administrative expenses declined 16% year over year to $53.3 million. Adjusted EBITDA went down 11% to $53.8 million in the reported quarter from $60.4 million in the prior-year quarter. Adjusted EBITDA margin decreased 130 bps to 17.3% in the fourth quarter.

Milacron Holdings Corp. Price, Consensus and EPS Surprise

Segmental Results

Advanced Plastic Processing Technologies: Net sales declined 6.5% year over year to $178 million. Excluding $4.8 million of unfavorable effects of currency movements, sales decreased 3.9% from the prior-year quarter. Adjusted EBITDA was up 5% year over year to $27.1 million.

Melt Delivery and Control Systems: Net sales edged down 1.3% year over year to $102.3 million. Excluding unfavorable effects of currency movements of $2.8 million, sales increased 1.4% from the prior-year period. Adjusted EBITDA declined 22% year over year to $25.2 million.

Fluid Technologies: Sales for the fourth quarter were $31.1 million, flat compared with the prior-year quarter. Sales improved 2.9% from the year-ago period, excluding $0.8 million of unfavorable impacts of currency movements. Adjusted EBITDA was $7.2 million, down from $7.4 million in the year-ago quarter.

Financial Update

Milacron reported cash and cash equivalents of $184 million at the end of 2018, down from $188 million at the end of 2017. The company generated $124.3 million of cash in 2018, compared with $110.4 million in 2017. Long-term debt was $829 million as of Dec 31, 2018, compared with $916 million as of Dec 31, 2017.

2018 Results

Milacron reported adjusted earnings per share of $1.78 in 2018, down 1.7% from $1.81 in the prior year. Earnings beat the Zacks Consensus Estimate of $1.67. Including one-time items, the company reported earnings per share of 58 cents compared with the year-ago quarter’s figure of 2 cents.

Sales increased 2% year over year to $1.26 billion in 2018. Excluding the favorable impact of currency movement, sales for the year increased 1.2% from the 2017 figure. The top line beat the Zacks Consensus Estimate of $1.25 billion.

Outlook

Milacron projects sales to decline 3-4% in 2019, including an anticipated headwind of 1% from foreign currency translation. Adjusted EBITDA margin is forecasted to be 17.5-18%. Free cash flow is expected to be $100-$110 million.

Shares of Milacron have dipped around 37.6% in the past year compared with the industry’s decline of 17.1%.

Zacks Rank and Other Stocks to Consider

Milacron currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Industrial Products sector are Axon Enterprise, Inc (NASDAQ:AAXN) , Alarm.com Holdings, Inc. (NASDAQ:ALRM) and Ennis, Inc. (NYSE:EBF) , each sporting Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axon has an expected earnings growth rate of 14.5% for 2019. The company’s shares have rallied 94.1% in the past year.

Alarm.com has an expected earnings growth rate of 7.8% for 2019. The stock has grown 65.1% in the past year.

Ennis has an expected earnings growth rate of 13.9% for 2019. Its shares have gained 4.5% in the past year.

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