morning, shares of water products company Advanced Drainage Systems (WMS
28.50, +3.10, +12.20%) move to nearly two-year highs in reaction to a decent
fiscal year 2019 sales outlook.
The company did report fourth quarter earnings and sales, but since the market seems to be reacting favorably to the FY19 outlook, let’s begin there. For the fiscal year Advanced Drainage sees revenues between revs of $1.375-1.425 bln. The midpoint of this guidance narrowly edged out Street views, the likely impetus behind the stock’s move higher today.
For the fiscal year Advanced Drainage also gave guidance for adjusted EBITDA in the range of $220-240 mln and capital expenditures between $60-70 mln.
On the fourth quarter print then, Advanced Drainage reported a loss per share of $0.11, which was wider than expected, with revenue growth of about 2% to $250.1 mln. Gross profit as a percentage of net sales was up 310 basis points to 19.2% versus 16.1% a year ago, primarily due to favorable pricing as well as lower manufacturing costs.
Domestic net sales were up 1.2% to $226.2 mln as compared to $223.4 mln in the prior year quarter, driven by favorable pricing and strong allied product sales in the construction markets. International net sales grew 15.1% to $23.9 mln as compared to $20.8 mln in the prior year quarter, mostly due to growth in Canadian construction markets and export sales.
Management also announced an increase to the quarterly cash dividend. The Board of Directors announced a $0.08/share (compared to the prior $0.07/share payout) dividend would be paid on June 15, 2018 to shareholders of record on the close of business on June 5, 2018.
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