Yahoo Finance Graco (GGG) Q4 Earnings & Revenues Beat, Increase Y/Y
Graco Inc.’s GGG fourth-quarter 2022 adjusted earnings of 73 cents per share beat the Zacks Consensus Estimate of 68 cents. Our estimate for fourth-quarter adjusted earnings was 66 cents. The bottom line improved 10.6% year over year.
GGG’s net sales of $555 million also outperformed the Zacks Consensus Estimate of $550 million. Our estimate for net sales in the reported quarter was $532.5 million. The top line increased 3% year over year driven by acquired operations.
On a regional basis, quarterly sales generated from the Americas grew 5%. In Europe, the Middle East and Africa (EMEA) region, sales increased 1% year over year (or up 12% at the constant-currency rate). Sales from the Asia Pacific were flat (or up 10% at the constant-currency rate).
Segmental Details
Revenues for the Industrial segment totaled $190.2 million (contributing to 34.3% of the quarter’s sales), rising 10% year over year, driven by solid growth in all regions. Our estimate for segmental revenues was $156.8 million. Adverse foreign currency translations lowered sales by 7%. Core sales grew 17% year over year.
Revenues in the Process segment grossed $130.2 million (contributing to 23.5% of the quarter’s sales), increasing 15% year over year. Our estimate for segmental revenues was $117.9 million. The improvement came on the back of a 16% rise in core sales, driven by growth in all product applications.
Revenues in the Contractor segment totaled $234.6 million (contributing to 42.2% of the quarter’s sales), down 7% year over year due to softening demand in all regions. Our estimate for segmental revenues was $257.7 million. Core sales decreased 4% in the quarter.
Graco Inc. Price, Consensus and EPS Surprise
Graco Inc. price-consensus-eps-surprise-chart | Graco Inc. Quote
Margin Profile
In the fourth quarter, Graco’s cost of sales grew 6.5% year over year to $282.2 million. Gross profit decreased 1% to $272.8 million, while the margin decreased 1.7 percentage points. An increase in product costs due to supply-chain woes and adverse foreign currency movement hurt the margin performance.
Operating income increased 5% year over year to $152.5 million. Operating margin increased 1 percentage point from the year-ago quarter. Interest expenses in the quarter totaled $1.3 million compared with $2.8 million reported in the year-ago period. The adjusted effective tax rate in the quarter was 19%.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Graco had cash and cash equivalents of $339.2 million compared with $624.3 million at the end of 2021. The long-term debt was $75 million, flat compared with the December 2021 level.
Graco generated net cash of $377.4 million from operating activities in 2022 compared with $456.9 million generated in the year-ago period. Capital used for purchasing property, plant and equipment totaled $201.2 million compared with $133.6 million in the year-ago period.
GGG paid out dividends worth $142.1 million to its shareholders in 2022, up 11.8% from the previous year. Graco repurchased common stocks worth $233.4 million in 2022.
Outlook
Amid microeconomic uncertainties, Graco expects to launch new products, explore new markets, expand its global channel and make strategic acquisitions. The company expects low single-digit organic revenue growth on a constant-currency basis for 2023.
Zacks Rank & Stocks to Consider
GGG currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Allegion plc ALLE presently sports a Zacks Rank #1 (Strong Buy). ALLE’s earnings surprise in the last four quarters was 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 8.7% in the past six months.
Valmont Industries, Inc. VMI presently has a Zacks Rank of 2 (Buy). VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 17.7% in the past six months.
IDEX Corporation IEX presently has a Zacks Rank of 2. IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.8% in the past six months.
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Graco Inc. (GGG) : Free Stock Analysis Report
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Allegion PLC (ALLE) : Free Stock Analysis Report
