By Kaitlin Schuler
Franklin Electric Co. Inc. said fourth-quarter earnings strengthened despite falling revenues and soft prices for oil and other commodities.
In the latest quarter, Fort Wayne-based Franklin Electric posted net income of $16.2 million or 33 cents per diluted share, up from $3.1 million or 6 cents per share in the year ago quarter.
Excluding unusual items in both quarters, adjusted earnings per share increased 13 percent to 35 cents from 31 cents a year ago. The latest quarter’s earnings met the analysts’ consensus forecast of 35 cents per share, as reported by Yahoo! Finance.
“We think Franklin Electric has turned the corner,” Sterne Agee CRT analyst Kevin Bennett said, “and investors looking for industrial exposure should buy the stock ahead of a return to solid EPS growth in 2016.”
Revenues declined 14 percent to $219.3 million from $253.8 million a year ago.
The fuel and water transportation systems manufacturer boasts 20 facilities in 13 countries, including Brazil, Canada, India and South Africa. As a result of the U.S. dollar’s current strength, they face lower international sales “due to foreign currency translation,” according to Tuesday’s press release.
The Water Systems division made up 74 percent of consolidated sales, while Fueling Systems represented 26 percent.
“Demand in our U.S. water business remains weak,” Chairman and Chief Executive Officer Gregg Sengstack told analysts during a conference call. “However, we saw a slight sequential improvement in the year-over-year quarterly decline. Sengstack said the company was “pleased” that the fourth quarter earnings “were a record for any fourth quarter in the Company’s history.”
“Fundamentally, not much has changed with significant foreign exchange and oil & gas headwinds and weak U.S. water sales driven by agriculture,” Bennett said. “While some headwinds remain, many others are in the rearview mirror and we are increasingly confident that 2015 is the trough in earnings.”
Sengstack estimated 2016 adjusted per-share earnings will land between $1.57 and $1.67; analysts currently predict an operating EPS of $1.65. “Similar to other companies that have already provided results and guidance,” the executive said, “we anticipate the year to start slow and gain momentum as the Northern Hemisphere moves into late spring.”
Net income of full-year 2015 increased 4.5 percent to $72.9 million or $1.50 per diluted share from $69.8 million or $1.41 per share.
Revenues decreased to $924.9 million from $1.05 billion in 2014.
In mid-day Nasdaq trading Tuesday, Franklin shares were down 30 cents, or one percent, at $28.39.