DXP Enterprises Earnings: Here’s Why Investors are Ambivalent Now

DXP Enterprises Inc. (NASDAQ:DXPE) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

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DXP Enterprises Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 12.99% to $0.87 in the quarter versus EPS of $0.77 in the year-earlier quarter.

Revenue: Rose 14.99% to $290.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: DXP Enterprises Inc. reported adjusted EPS income of $0.87 per share. By that measure, the company missed the mean analyst estimate of $0.95. It missed the average revenue estimate of $314.27 million.

Quoting Management: David R. Little, Chairman and Chief Executive Officer remarked, “In the short term, there are still a lot of questions around the pace of growth in the U.S. and Canada. We have demonstrated over the past few years our ability to successfully compete and deliver strong revenues and earnings through inconsistent times, and we are confident that we can continue to do so. During the first quarter, we experienced tepid growth within our Service Center and Supply Chain Services business segments and lumpy performance within Innovative Pumping Solutions. DXP’s Sales and Operational Excellence programs, which impact the customer, continue to help us drive share gains, margins and cash flow in this low growth environment. While we are cautiously optimistic about the second half of 2013, overall, we expect to meet our expectations. That means we will continue to invest in the business and position DXP to gain market share. We believe the diversity of our business, our cost discipline and an attractive acquisition environment, positions DXP for the balance of 2013 and beyond.”

Key Stats (on next page)…

Revenue decreased 0.99% from $293.01 million in the previous quarter. EPS decreased 5.43% from $0.92 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.92 to a profit $1.02. For the current year, the average estimate has moved up from a profit of $3.77 to a profit of $4.03 over the last ninety days.

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