W.R. Grace Earnings: SNAPS Strong Streak with Profit Drop

W.R. Grace & Co. (NYSE:GRA) reported its results for the second quarter. W.R. Grace & Company is engaged in the production and sale of specialty chemicals and specialty materials on a global basis through its two operating segments, Grace Davison and Grace Construction Products.

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W.R. Grace & Co. Earnings Cheat Sheet

Results: Net income for W.R. Grace & Co. fell to $69.3 million (90 cents per share) vs. $75.8 million ($1 per share) a year earlier. This is a decline of 8.6% from the year-earlier quarter.

Revenue: Remained constant at $826.7 million.

Actual vs. Wall St. Expectations: W.R. Grace & Co. fell short of the mean analyst estimate of $1.08 per share. Analysts were expecting revenue of $816.2 million.

Quoting Management: “I am pleased with our performance this quarter, particularly our overall pricing and volume growth, and the sequential margin improvements we targeted and achieved in our Materials Technologies and Construction Products operating segments,” said Fred Festa, Grace’s Chairman and Chief Executive Officer. “Despite renewed headwinds from Europe, we affirm our outlook for Adjusted EBIT. We remain confident in our ability to move our business forward, and we are prepared to deliver another year of solid earnings growth.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 12.4% from the year earlier, while the figure increased 29.4% in the fourth quarter of the last fiscal year, 48.1% in the third quarter of the last fiscal year and 48.6% in the second quarter of the last fiscal year.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the first quarter, it topped the mark by 7 cents, and in the fourth quarter of the last fiscal year, it was ahead by one cent.

Over the last five quarters, revenue has increased 15% on average year-over-year. The biggest increase came in the third quarter of the last fiscal year, when revenue rose 26.7% from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from $1.23 per share to $1.08, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is now $4.09 per share, down from $4.25 sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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