Hillenbrand Q4 Results Miss Estimates, Provides Weak Outlook

(RTTNews) - Diversified industrial company Hillenbrand, Inc. (HI) reported Monday a profit for the fourth quarter that declined seven percent from last year, primarily due lower gross margins and costs related to the Coperion Capital GmbH acquisition.

Both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also provided initial earnings and revenue guidance for the full-year 2014, below Street view.

"We are encouraged by order activity throughout the Process Equipment Group, with order backlog at a record-high level this past quarter. This increase was driven by strong demand from the North American polyolefin market," President and CEO Joe Raver said in a statement.

The Batesville, Indiana-based company reported net income of $23.1 million or $0.37 per share for the fourth quarter, lower than $24.8 million or $0.40 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $31.5 million or $0.50 per share, compared to $31.0 million or $0.50 per share in the year-ago quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter surged 74 percent to a record $440.90 million from $253.50 million in the same quarter last year, and missed three Wall Street analysts' consensus estimate of $463.00 million.

Process Equipment Group revenue soared 186 percent to $291 million, due primarily to the acquisition of Coperion in December. Excluding the contribution from Coperion, revenues declined 11 percent, due to lower demand for equipment used in certain end markets, principally potash and proppants.

Batesville revenue declined 1 percent to $150 million, driven by the increased rate at which consumers opted for cremation.

Meanwhile, process equipment group order backlog increased 6 percent sequentially to $604 million from the third quarter.

Gross margin for the quarter contracted 660 basis points to 32.9 percent, while operating expenses as a percentage of total revenues declined 110 basis points from last year.

For fiscal 2013, the company reported net income of $63.4 million or $1.01 per share, lower than $104.8 million or $1.68 per share in the prior year. Excluding items, adjusted net income for the year was $118.3 million or $1.88 per share, compared to $109.7 million or $1.76 per share in the year ago. Revenues for the full year surged 58 percent to $1.55 billion from last year.

Analysts expected the company to report full-year 2013 earnings of $1.90 per share on revenues of $1.58 billion.

Looking ahead to fiscal 2014, Hillenbrand currently expects adjusted earnings in a range of $2.00 to $2.10 per share, on projected revenue of about $1.7 billion. Street is currently looking for full-year 2014 earnings of $2.15 per share on annual revenues of $1.74 billion.

Meanwhile, revenues from the process equipment group is expected to be about $1.1 billion and Batesville is anticipated to deliver about $600 million in revenue.

"We will continue to execute the growth strategy which has transformed Hillenbrand into a global diversified industrial company. With the substantial investments we have made over the past three years, we are well-positioned to deliver long-term growth and shareholder value," Raver added.

HI closed Monday's regular trading session at $28.50, up $0.26 or 0.92% on a volume of 0.25 million shares.