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Carlisle's (CSL) Q1 Earnings Top Estimates, Revenues Flat Y/Y

·5 min read

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 and EPS Surprise
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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Astec Industries, Inc. (ASTE) : Free Stock Analysis Report

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Griffon Corporation (GFF) : Free Stock Analysis Report

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