Colfax Earnings: Here’s Why the Stock is Up Now

Colfax Corporation (NYSE:CFX) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.8%.

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Colfax Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 13.04% to $0.26 in the quarter versus EPS of $0.23 in the year-earlier quarter.

Revenue: Rose 6.85% to $947.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Colfax Corporation reported adjusted EPS income of $0.26 per share. By that measure, the company beat the mean analyst estimate of $0.24. It missed the average revenue estimate of $958.57 million.

Quoting Management: Steve Simms, President and Chief Executive Officer, stated, “We are pleased to report results for the first quarter that exceeded our expectations. Although sales fell short of our targets, we benefited from strong operating margins in both segments, reflecting the impact of our improvement plans. Overall, the underlying market drivers for our long cycle gas- and fluid-handling business remain positive. Sales and orders for the quarter in this business were impacted by trends specific to individual sectors and we anticipate solid growth in the segment for the balance of 2013. Demand remained soft in the fabrication technology segment, but we continue to demonstrate that we can improve margins in the segment without sales growth. We remain excited about the future of both of our businesses and will continue to focus on our improvement initiatives and programs to deliver organic growth. We were also pleased with the refinancing of our debt during the quarter, which will result in reduced interest expense in future periods.”

Key Stats (on next page)…

Revenue decreased 7.82% from $1.03 billion in the previous quarter. EPS decreased 38.1% from $0.42 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.51 and has not changed. For the current year, the average estimate has moved down from a profit of $1.95 to a profit of $1.85 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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