DXP Enterprises (DXPE) Reports Q3 Earnings, Sales Fall Y/Y
Zacks Investment Research | Nov 14, 2016 09:35PM ET
DXP Enterprises, Inc. (NASDAQ:DXPE) reported mixed third-quarter 2016 results with earnings beating expectations and revenues missing estimates. The company's earnings of 2 cents per share compared favorably with the year-ago loss of $3.64. The Zacks Consensus Estimate was of a loss of 2 cents.
Operational Update
The company’s third-quarter 2016 sales came in at $230 million, down 24.1% year over year. The top line also missed the Zacks Consensus Estimate of $243 million. The downside stemmed from weak sales from all the three segments of the company.
Cost of goods sold plunged 23.5% year over year to $166.2 million. Gross margin also contracted 60 basis points (bps) to 27.7%. Selling, general and administrative (SG&A) expenses were down 21.6% year over year to $58.9 million. Operating margin was down 100 bps year over year to 8.2%.
Segment Performance
Revenues at the Service Centers segment declined 23.7% year over year to $152 million.
Revenues at the Innovative Pumping Solutions segment plummeted 35.2% year over year to $39.8 million.
The Supply Chain Services segment’s revenues dipped 9.8% year over year to $38.2 million.
Financial Position
Exiting third-quarter 2016, DXP Enterprises had cash worth $3.4 million compared with $1.7 million at the end of 2015. Long-term debt came in at $203 million as against $298.7 million as of Dec 31, 2015.
In the first nine months of 2016, the company generated $35.5 million cash from operating activities as against $74.8 million accrued in the year-ago comparable period.
Outlook
DXP Enterprises aims to boost its business on the back of lower costs, productive labor force, reduced debt and greater innovation.
DXP ENTERPRISES Price, Consensus and EPS Surprise
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