Published on 8 Nov 2022 on Zacks via Yahoo Finance
Altra Industrial (AIMC) Down 4.5% Since Q3 Earnings Release
Altra Industrial Motion Corp. AIMC reported lackluster results for third-quarter 2022. AIMC’s earnings and sales missed the Zacks Consensus Estimate by 3.6% and 0.4%, respectively. Shares of the company declined 4.5% since the earnings release on Oct 31.Adjusted earnings in the quarter under review were 80 cents per share, missing the Zacks Consensus Estimate of 83 cents. However, the bottom line came in line with the year-ago quarter.On Oct 27, the company announced that it has inked a deal to be acquired by Regal Rexnord Corporation (Regal Rexnord), for a sum of $5.0 billion on an enterprise value basis. Per the deal, the shareholders will receive $62.00 (a 54% premium to the closing price of the company’s common stock on Oct 26) in cash for each share of AIMC. Subject to customary closing conditions, the transaction will likely close in the first half of 2023.
Revenue Details
In the reported quarter, Altra Industrial’s revenues were $466.3 million, reflecting a decrease of 0.6% from the year-ago comparable period due to the divestiture of the JVS business and changes in foreign exchange rates. Organic sales in the reported quarter expanded 1.9%, driven by healthy end-market businesses, including aerospace and defense, factory automation as well as turf and garden. The Nook acquisition had a positive impact of 2.5% on sales. Foreign currency translation left a negative impact of 5%.Altra Industrial’s revenues missed the Zacks Consensus Estimate of $467 million.Altra Industrial reports revenues under two heads, namely Automation & Specialty and Transmission Technologies. A brief snapshot of the segmental sales is provided below:Revenues generated from Power Transmission Technologies amounted to $239.3 million, increasing 2.9% year over year, driven by strength across end markets, including metals and mining, turf and garden as well as agriculture end markets. Favorable pricing had an impact of $13.8 million on net sales. However, foreign currency had an adverse impact of $12.8 million on net sales in the quarter.Automation & Specialty’s sales were $228.6 million in the third quarter, down 3.9% from the year-ago quarter. The JVS business divestiture had an unfavorable impact of $41.3 million on sales and foreign woes decreased sales by $10.7 million in the quarter.