Archive for October, 2015

Shares of Colfax fell 14% after releasing Q3 2015 results!

October 17th, 2015 Comments off

Shares of Colfax Corp. (NYSE: CFX) the global manufacturer of gas- and fluid-handling and fabrication technology products and services, fell more than 14% after announcing Q3 2015 results:

Ouch, what happened?

Net sales were $969.1 million in the third quarter, a decrease of 16.8% from the prior year. Net sales decreased 6.5% organically compared to the third quarter of 2014.
Net income was $18.4 million, or $0.15 per dilutive share. Adjusted net income was $29.5 million, or $0.24 per share, compared to $71.3 million for the third quarter of 2014, or $0.57 per share.

Third quarter gas- and fluid-handling orders decreased by 17.6% to $444.2 million compared to orders of $539.4 million for the third quarter of 2014, an organic order decrease of 12.5%.
Gas- and fluid-handling finished the period with backlog of $1,313.8 million.

The company has been hit by the severe downturn in the oil and gas market we all witnessed but their marine market showed continued weaknesses, too.

The new CEO Matthew Trerotola explained how they intend to react in this difficult situation:

“We are aggressively accelerating cost reduction programs in response to this cyclical downturn. By the end of 2016, we now expect to eliminate in excess of $100 million from our cost structure and reduce the workforce by approximately 1,500 compared to where we started 2015. In addition, the Board authorized a stock repurchase of up to $100 million.“

On the conference call he added that “through the strategic planning process, we believe that these downturns are cyclical, not structural, but the timing of the recovery in these markets is uncertain and may not be seen before 2017.”

So it’s no surprise that they lowered earnings expectations for 2015 to a range of $1.52 to $1.56.

But this does not stop the company to pursue their M&A goals. The CEO indicated that they have several active deals in the pipeline.

So what should shareholders do now:

Perhaps the best is …. nothing ….!
Hold your shares and wait!

No one really knows when oil and gas prices will go up again but for sure one day they will recover!
Colfax continues to be the very well run and value oriented business with a strong balance sheet we all know for years.
The shares trade at a p/e ratio of 18 (FY 2015). Not extremely cheap, the market still sees the quality of this company. Insiders also bought shares in September.
Outside investors could consider to join them going into 2016 in order to slowly anticipate an overall market turn!

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Colfax released Q3 2015 results and missed estimates

October 14th, 2015 Comments off

Colfax Corp. (NYSE: CFX) today released Q3 2015 results!

They missed estimates on earnings and on revenues reflecting the brutal downturn of their industry.

The board authorized a stock repurchase program of up to $100 mln.



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