Q3 2014 was a disappointing quarter for this successful company.
Colfax (NYSE: CFX) is working in a still difficult macroeconomic environment.
Results were short of expectation. Demand remained soft in both segments, the gas and fluid handling and in the fabrication segment, and margins were below expectations in fabrication technology as CEO Steve Simms pointed our on the conference call.
Total net sales came in at $1.160 billion, an increase of 15% over the same period last year. This consists of 20% growth from acquisitions and negative 1% impact from foreign exchange, resulting in an organic decline of 4%.
As a consequence Colfax is lowering their guidance range for 2014:
They now expect full year revenue to be between $4.675 billion and $4.725 billion and adjusted EPS to fall in the range from $2.11 to $2.18.
But the general outlook given by Steve Simms was rather upbeat:
The new fluid handling management team has executed a restructuring program and the order rate at their high-margin services business has continued to strengthen.
Each of their businesses will be reducing 2015 costs in response to the current demand environment.
And arguably the most important hint came at last:
„We continue to aggressively pursue strategic acquisition. Our M&A pipeline is extremely robust with numerous active projects as well as many strong prospects for 2015.“
Don’t forget that part of Colfax business model is the successful acquisition and integration of new businesses into the existing organisation.
So stay tuned for more on this front!
Colfax stock yesterday closed at $ 54.03 . This translates into a p/e ratio FY 2014 of 26 with respect to the lower end of guidance.
Colfax is only temporarely slowed down by the macroeconomic environment.
The stock remains a buy on weak days like these!