CECO Beats on Q4 Earnings, Shares Up - Analyst Blog
March 10 2014 - 10:20AM
Zacks
Share prices of CECO
Environmental Corp. (CECE) increased 13.6% to close at
$18.64 on Mar 7 after the company declared its fourth-quarter and
full-year 2013 results on Mar 6. The company reported adjusted net
income of 26 cents per share, beating the Zacks Consensus Estimate
of 20 cents per share by 30%. Earnings were also up 44.4% year over
year, compared with 18 cents in the fourth quarter of 2012.
For full-year 2013, the company
reported adjusted earnings of 98 cents per share, reflecting a
year-over-year increase of 50.8% from the earnings of 65 cents in
2012.
The growth in earnings was driven
by the company’s persistent focus on diligent operational execution
and its cost optimization initiatives. The company is also
streamlining its business by divesting some of its non-core
businesses.
Operational
Update
The company reported net sales of
$68.7 million, up 100.2% year over year from $34.3 million in the
year-earlier quarter. This increase in sales was primarily driven
by successful integration of the company’s recent acquisitions like
the Aarding, Adwest and Met-Pro Corporation. These acquisitions
contributed as much as $34.3 million to the quarter’s revenues, out
of which $23.3 million is attributable to sales in Met-Pro.
However, revenues fell short of the Zacks Consensus Estimate of $71
million.
New order bookings were up 154%
annually to $66.8 million in the quarter. For 2013, the new order
bookings were at $199.2 million compared with $139.7 million in
2012.
Backlog at the end of the year was
$98.5 million, a significant increase from the 2012 figure of $59.5
million. However, the backlog decreased slightly from $100.4
million in the third quarter of 2013. The company’s acquisitions
contributed as much as $37.1 million to backlog.
Income and
Expense
Gross profit increased by 92% to
$21.5 million in the quarter compared with $11.2 million in the
prior-year quarter. Selling and administrative expenses were $13.1
million during the quarter, up about 95.5%. Acquisition-related
expenses totaled $0.6 million in the quarter.
Balance sheet
Exiting the year, the balance of
cash and cash equivalents was $22.7 million, a decrease from $23.0
million in the prior year. The company had a debt (excluding
current portion) of $79 million. The company had no bank debt in
2012.
Interest expenses increased to $0.8
million in the quarter from $0.3 million in the prior-year
quarter.
Dividend
The company’s board of directors
has approved a dividend of 5 cents a share payable on Mar 31, to
shareholders of record on Mar 19.
Looking Ahead
The company remains positive about
the scope of growth in 2014. It’s ‘One-CECO’ sales initiative is
expected to drive up the company’s profits going forward. Moreover,
CECO’s strengthening position in China is encouraging.
Zacks Rank
CECO currently carries a Zacks Rank
#3 (Hold).
Performance of Some Other
Stocks in the Pollution Control industry
Calgon Carbon
Corporation (CCC) reported fourth-quarter 2013 earnings of
20 cents per share compared with 16 cents per share in the year-ago
quarter. The quarterly results beat the Zacks Consensus Estimate by
a penny.
Tetra Tech
Inc(TTEK) reported fiscal first-quarter 2014 earnings of
42 cents per share, beating the Zacks Consensus Estimate of 38
cents. Earnings increased 2.4% from the prior-year figure of 41
cents a share.
Pall Corporation
(PLL) reported fiscal second-quarter 2014 (ended Jan 31, 2014) pro
forma earnings of 82 cents a share, 2.5% above the Zacks Consensus
Estimate of 80 cents. Earnings for the quarter also beat the
prior-year quarter's earnings of 73 cents a share by 12%.
CALGON CARBON (CCC): Free Stock Analysis Report
CECO ENVIRNMNTL (CECE): Free Stock Analysis Report
PALL CORP (PLL): Free Stock Analysis Report
TETRA TECH NEW (TTEK): Free Stock Analysis Report
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