Shiloh Q2 Earnings Lag Ests; To Acquire FMS - Analyst Blog

Shiloh Industries Inc. SHLO reported impressive results for fiscal second-quarter 2014 (ended Apr 30, 2014). Earnings came in at 47 cents per share, reflecting an increase of 9.3% year over year. However, the bottom-line result lagged the Zacks Consensus Estimate of 49 cents per share.  

Revenues

Shiloh Industries generated net revenue of $209.0 million, up 14.7% year over year and above the Zacks Consensus Estimate of $207 million. The top-line growth was driven by new product offerings, market share gains and acquisitions.

Margins

Cost of sales increased by 15.5% year over year and represented 90% of total revenue, up 60 basis points (bps) compared with the year-ago quarter. Selling, general and administrative expenses were 5.4% of total revenue versus 4.3% recorded in the year-ago quarter.

Operating income was $12.7 million, up 10.3% year over year while operating margin stood at 6.1% versus 6.3% in the year-ago quarter.

Balance Sheet/ Cash Flow

Exiting the fiscal second-quarter 2014, Shiloh Industries had cash and cash equivalents of $579 million, down from $1,023 million at the preceding quarter-end. Long-term debt was $118.6 million versus $116.7 million in the previous quarter.

In the first-half of fiscal 2014 (ended Apr 30, 2014), Shiloh Industries generated cash of $10.9 million versus $12.4 million generated in the comparable year-ago period. Capital expenditure was $11.5 million, down 7.2% year over year.

Acquisition

Along with the earnings release, Shiloh Industries announced the signing of an agreement to acquire Finnveden Metal Structures FMS from FinnvedenBulten AB for approximately $56.6 million. The transaction adds stamping business and magnesium die casting technology of FinnvedenBulten, along with a $180 million revenue generation capacity and 800 employees to the company's portfolio. The acquisition is expected to close by June end.
 
Shiloh Industries has a $268.5 million market capitalization and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the steel industry worth a look include Universal Stainless & Alloy Products Inc. USAP, ThyssenKrupp AG (TYEKF) and Tower International, Inc. TOWR. While Universal Stainless & Alloy Products sports a Zacks Rank #1 (Strong Buy), both ThyssenKrupp AG and Tower International have a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SHILOH INDS INC SHLO: Get Free Report
 
TOWER INTL INC TOWR: Free Stock Analysis Report
 
THYSSEN A G (TYEKF): Get Free Report
 
UNVL STAINLESS USAP: Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!