Wesco Aircraft Misses, Gives Outlook - Analyst Blog
January 30 2013 - 4:10AM
Zacks
Wesco Aircraft Holdings,
Inc. (WAIR) reported first quarter fiscal 2013 results.
Earnings of 25 cents per share were down by a penny from the
year-ago figure of 26 cents per share. Wesco Aircraft also missed
the Zacks Consensus Estimate by 2 cents.
Including one-time items of 6 cents per share related to
amortization of intangible assets and amortization of deferred
financing costs, GAAP earnings reported by the company were 19
cents per share, down from 24 cents per share.
The results reflect lower gross margins due to changes in the
hardware sales mix, lower margin electronic product sales growing
more rapidly than hardware sales and addition of SG&A costs
associated with the Interfast business. However, these were
partially offset by higher sales due to the acquisition of
Interfast and a lower tax rate.
Total Revenue
Sales for the reported quarter increased 9.7% to $211.2 million
from $192.6 million in the year-ago quarter. However, the figure
was lower from the Zacks Consensus Estimate of $218 million.
Segment revenue from North America was up 10.3% year over year
attributable to acquisition of Interfast Inc. Segment revenue from
Rest of World was also up by 32.9% year over year driven by strong
international growth.
Adjusted earnings before interest tax, depreciation and
amortization (EBITDA) were $43.6 million, down 8.1% year over year.
Selling, general and administrative expenses were $34.7 million, up
from $28.2 million in the year-ago quarter.
Financial Condition
Cash and cash equivalents as of Dec 31, 2012 were $39.7 million,
down from $44.7 million as of Dec 31, 2011. Long-term debt as
of Dec 31, 2012 was $593.8 million, up from $531 million at the end
of the first quarter of 2012.
Capital expenditure, during the quarter under review, was $597
million versus $644 million in the year-ago quarter.
Guidance
The company maintained its top-line guidance for fiscal 2013 in the
range of $865 million to $890 million. It expects adjusted earnings
per share to be in the range of $1.14 to $1.19 per share.
Our Take
Wesco Aircraft’s top and bottom line missed this quarter. However,
more bookings would help the company to achieve top- and
bottom-line guidance in fiscal 2013. Moreover, integration with
Interfast Inc. is progressing well and would prove beneficial for
the company, going forward. However, these positives are offset by
uncertainty related to defense budget cuts though at a lesser
extent, increase in interest expenses due to increase in debt and
foreign currency risk. The company currently retains a short-term
Zacks Rank #4 (Sell).
Based in Valencia, California, Wesco Aircraft Holdings, Inc.
distributes and provides supply chain management services to the
aerospace industry in North America and internationally. The
company’s services include traditional distribution, management of
supplier relationships, quality assurance, kitting, just-in-time
delivery, and point-of-use inventory management.
Other preferable stocks in this category are Huntington
Ingalls Industries, Inc. (HII) with a Zacks Rank #1
(Strong Buy), Lockheed Martin Corporation (LMT)
with a Zacks Rank #2 (Buy), and Northrop Grumman
Corporation (NOC) with a Zacks Rank #3 (Hold).
HUNTINGTON INGL (HII): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
WESCO AIRCRAFT (WAIR): Free Stock Analysis Report
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