Industrial products manufacturer Actuant Corp. (ATU) on Thursday reported a 32 percent decline in profit for the first quarter from last year, reflecting lower sales in its engineered solutions segment and a litigation charge.
Both adjusted earnings and quarterly sales missed analysts' expectations. Looking ahead, the company forecast financial results for the second quarter below analysts' estimates and also lowered its fiscal 2015 outlook.
The Menomonee Falls, Wisconsin-based company's net earnings for the first quarter were $24.67 million or $0.28 per share, down from $36.04 million or $0.48 per share in the prior-year quarter. The latest quarter's results include an unfavorable litigation charge of $0.02 per share.
Net earnings from continuing operations for the quarter declined to $24.7 million or $0.38 per share from $33 million or 0.44 per share in the prior-year quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the latest quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 3 percent to $327.77 million from $339.56 million in the same quarter last year. Analysts' consensus revenue estimate was $336.26 million.
However, core sales for the quarter declined 1 percent. Net acquisitions and divestitures were neutral, while unfavorable foreign exchange rate changes were 2 percent.
On a segmental basis, sales from the industrial segment rose 4 percent from last year to $102.41 million, while energy segment sales grew 3 percent to $111.52 million.
However, engineered solutions segment sales declined 14 percent from last year to $113.83 million, reflecting the decline from the RV product line divestiture and a stronger U.S. dollar.
Actuant noted that strong results in the energy segment were offset by sluggish demand in other markets and foreign currency headwinds.
The company said it expected difficult comparisons in the Engineered Solutions segment with the prior year's European truck pre-buy, but demand in most other markets in the Industrial and Engineered Solutions segments did not improve.
Looking ahead to the second quarter, Actuant forecast earnings of $0.25 to $0.30 per share on sales in a range of $310 million to $320 million. Analysts expect the company to report earnings of $0.40 per share for the quarter on revenues of $328.21 million.
Actuant noted that in addition to the more challenging economic and currency environment, the second quarter outlook incorporates the normal seasonal slowdown experienced across nearly all of its businesses.
For fiscal 2015, Actuant now forecasts earnings in a range of $1.85 to $2.00 per share and total sales of about $1.33 billion to $1.37 billion. Earlier, the company forecast earnings of $2.05 to $2.15 per share for the year on total sales in a range of $1.43 billion to $1.48 billion.
Street expects the company to report earnings of $2.05 per share for the year on revenues of $1.43 billion.
Mark Goldstein, President and CEO of Actuant said, "We are beginning to see the increased impact of the recent sharp decline in oil prices on order patterns and pricing within our oil & gas markets, both within the Energy and Industrial segments. We also are experiencing sluggish demand in certain of our other markets, notably off-highway equipment and agriculture."
Goldstein also noted that the U.S. dollar has strengthened, resulting in further headwinds.
ATU is currently trading at $27.69, down $0.94 or 3.28 percent on a volume of 36,040 shares.
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