Carlisle's (CSL) Q1 Earnings Top Estimates, Revenues Flat Y/Y
Carlisle Companies Incorporated CSL reported decent first-quarter 2021 results wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
The company’s adjusted earnings were $1.47 per share, beating the consensus estimate of 68 cents by 116.2%. However, the bottom line declined 12% on a year-over-year basis due to lower operating income and higher corporate expense.
Carlisle Companies Incorporated Price, Consensus and EPS Surprise
Carlisle Companies Incorporated price-consensus-eps-surprise-chart | Carlisle Companies Incorporated Quote
Inside the Headlines
In the reported quarter, Carlisle’s revenues came in at $1,029 million, flat year over year. This was attributable to 1.4% fall in organic revenues, partially offset by 0.4% benefit from acquired assets and a positive impact of 0.9% from changes in foreign exchange rates.
However, the top line surpassed the Zacks Consensus Estimate of $976 million by 5.5%.
The company reports results under four segments — Carlisle Construction Materials (“CCM”), Carlisle Interconnect Technologies (“CIT”), Carlisle Fluid Technologies (“CFT”), and Carlisle Brake & Friction (“CBF”). The quarterly segmental results are briefly discussed below.
Revenues from CCM totaled $719.3 million, increasing 6.3% year over year. It represented 69.9% of the company’s revenues. Organic revenues grew 5.7% on the back of higher demand for U.S. commercial roofing and Architectural Metals platform. Solid growth momentum in Europe was a vital factor as well.
CIT revenues, representing 15.1% of total revenues, were $155.8 million, down 30.6% year over year. The decline was primarily attributable to a 31.5% fall in organic revenues on account of significant decrease in orders from Aerospace customers, partially offset by improving demand for medical products.
CFT revenues, representing 6.4% of total revenues, were $65.8 million, up 12.9% year over year. In the first quarter, organic revenues increased 5.3% on account of solid growth across general industrial markets, along with benefits from acquisitions. However, it was partially offset by weakness in transportation markets.
CBF revenues were $88.1 million, increasing 24.1% year over year. It represented 8.6% of revenues. Organic revenues in the quarter increased 20.4%, driven by higher demand in construction and agricultural off-highway vehicle end markets.
Operating Margin Details
In the reported quarter, Carlisle’s cost of sales increased 2.1% to $767.3 million. It represented 74.6% of net sales compared with 73% a year ago.
Selling and administrative expenses decreased 1.3% to $159.8 million. It represented 15.5% of net sales compared with 15.7% in the year-ago quarter. R&D expenses totaled $12.6 million, down 12.5%.
Operating income was $89.5 million, down 12.9% year over year, while margin contracted 127 basis points to 8.7%. Backed by solid M&A pipeline, the company announced its plan to invest $60 million in a new Polyiso Insulation facility.
Balance Sheet and Cash Flow
Exiting the first quarter, Carlisle had cash and cash equivalents of $767.2 million compared with $902.2 million at the end of previous quarter. Long-term debt (including current portion) was $2,082.2 million, up from $2,081.3 million sequentially.
In the first three months of 2021, the company generated net cash of $67.6 million from operating activities compared with $53.2 million a year ago.
Outlook
In 2021, Carlisle expects revenue growth of low double-digit for CCM segment, driven by strength across Architectural Metals, European and Polyurethanes markets. Price discipline and robust demand for re-roofing are contributing factors as well. CIT segment is expected to decline in the mid to high single-digit range while the CFT segment is likely to witness a low double-digit revenue growth on the back of new product introductions. Encouraged by record bookings and solid momentum across Construction and Agriculture markets, the CBF segment estimates revenue growth of 30%.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks are Astec Industries, Inc. ASTE, Franklin Electric Co., Inc. FELE and Griffon Corporation GFF. While Astec Industries sports a Zacks Rank #1 (Strong Buy), Franklin Electric and Griffon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Astec Industries delivered a positive earnings surprise of 172.7%, on average, in the trailing four quarters.
Franklin Electric delivered a positive earnings surprise of 19.2%, on average, in the trailing four quarters.
Griffon delivered a positive earnings surprise of 115.5%, on average, in the trailing four quarters.
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