Pool Corp's (POOL) Q4 Earnings And Revenues Beat Estimates
Zacks Investment Research | Feb 13, 2020 09:58PM ET
Pool Corporation (NASDAQ:POOL) reported better-than-expected fourth-quarter 2019 results. The bottom line beat the Zacks Consensus Estimate for the third consecutive quarter and the top line topped the same for the second straight quarter.
Adjusted earnings of 44 cents per share in the quarter topped the Zacks Consensus Estimate of 35 cents and increased 7.3% from the year-ago quarter’s tally. Quarterly net revenues totaled $582.2 million, which surpassed the consensus mark of $572.7 million and increased 7.2% year over year.
Revenue growth can be primarily attributed to robust performance of the company’s Base business, primarily driven by continuous expansion in commercial and building material products along with healthy demand for construction materials and products used in the remodel and replacement of in-ground pools.
Pool Corporation Price, Consensus and EPS Surprise
Let’s discuss the quarterly numbers.
Segmental Performance
Pool Corp reports operations under two segments — The Base Business segment (constituting majority of the business) and the Excluded segment (sale centers excluded from the base business).
Revenues in the Base Business segment increased 6.9% year over year to $575.8 million. Also, operating income moved up 3.8% to $27.4 million. However, operating margin contracted 10 basis points (bps) from the year-ago quarter’s number to 4.8%.
The Excluded segment delivered net revenues of $6.4 million, up from $4.5 million registered in the prior-year quarter. The segment reported operating loss of $1.6 million compared with the year-ago quarter’s loss of $0.4 million.
Operating Highlights & Expenses
Cost of sales in the fourth quarter increased 9.8% from the prior-year quarter’s figure. Gross profit, as a percentage of net sales, declined 170 basis points (bps) to 27.8% from the year-ago quarter’s figure.
Operating income dropped 0.7% year over year to $25.8 million. Also, the operating margin declined 40 bps to 4.4% from the prior-year quarter’s level. Selling and administrative expenses inched up 1.3% year over year. Net income totaled $18 million, up from $16.8 million recorded in the year-ago quarter.
Balance Sheet
As of Dec 31, 2019, Pool Corp’s cash and cash equivalents amounted to $28.6 million compared with $16.4 million on Dec 31, 2018. Total net receivables, including pledged receivables, rose 9% and inventory levels rose 4% year over year. Its net long-term debt amounted to $499.7 million, down 24% from the prior-year quarter’s level. Goodwill increased to $188.6 million compared with $188.5 million reported in the prior-year quarter.
Get The News You Want
2019 Highlights
In 2019, net sales amounted to $3.2 billion, up 6.7% year over year.
Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $5.83 compared with $5.26 in 2018.
Operating margin increased 20 bps to 10.7% for the year ended Dec 31, 2019, compared with 10.5% reported in 2018.
2019 Guidance
For 2020, Pool Corp expects EPS in the range of $6.47-$6.77 compared with the prior guidance of $6.41-$6.71. The Zacks Consensus Estimate for current-year earnings is pegged at $6.64.
Zacks Rank & Key Picks
Pool Corp currently carries a Zacks Rank #3 (Hold). You can see Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.