Anixter Q4 Profit Rises

(RTTNews) - Anixter International Inc. (AXE) reported that its net income for the fourth quarter of 2018 was $41.8 million compared to $0.4 million last year. The largest driver of the increase was driven by the 2017 tax expense. Earnings per diluted share of $1.22 compared to $0.01 in the previous year.

Other, net expense of $7.6 million compares to $0.1 million last year. The change was driven by $4.6 million of expenses due to the loss on extinguishment of the $350 million of 5.625% Senior Notes due 2019.

The effective tax rate of 30.2% compares to 99.4%. The lower effective tax rate in the current quarter is due primarily to higher tax expense recorded in the fourth quarter of 2017 related to the Tax Cuts and Jobs Act of 2017.

Sales increased 5.2% to $2.1 billion. The latest-quarter sales include the favorable impact of the security acquisitions completed in the second quarter of 2018 and the unfavorable impacts of lower average copper prices and generally weaker foreign currencies. Adjusting for these impacts, organic sales increased 5.1%.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.45 per share and revenues of $2.11 billion. Analysts' estimates typically exclude special items.

The company estimates 2019 organic sales growth in the 3 - 6% range, with first quarter 2019 organic sales growth in the 3% - 5% range. Based on outlook for low-to-mid single digit sales growth and the related investment in working capital to support that growth, combined with ongoing investment in innovation and business transformation, it estimates cash flow from operations of $150 - $175 million and capital investment of $55 - $60 million.