Graco Q3 adjusted EPS misses estimates despite record sales

Graco

Wed 21:30

Overview
US fluid management equipment supplier's Q3 sales grew 8% yr/yr, slightly missed analyst expectations
Adjusted EPS and adjusted net earnings for Q3 missed analyst expectations
Company repurchased $132 mln of shares and announced partnership with ABB for data center cooling

Outlook
Graco expects fourth-quarter revenue between $610 mln and $640 mln
Company says end market conditions remain mixed
Graco continues to invest in innovation and expansion into growth markets

Result Drivers
ORGANIC AND ACQUISITION GROWTH - Co said Q3 sales growth was split evenly between organic growth and contributions from acquired operations
PRICE REALIZATION OFFSET COSTS - Adjusted operating earnings rose as price increases offset higher product costs
BROAD-BASED DEMAND - Co cited growth in professional paint, powder finishing and semiconductor applications, as well as contributions from acquisitions, as drivers of performance across segments and regions

Company press release: ID:nBw8lPXp5a

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Sales
Slight Miss*
$586.40 mln
$588.04 mln (8 Analysts)
Q3 Adjusted EPS
Miss
$0.81
$0.82 (8 Analysts)
Q3 EPS
 
$0.75
 
Q3 Adjusted net earnings
Miss
$131.30 mln
$135.39 mln (7 Analysts)
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the industrial machinery & equipment peer group is "buy."
Wall Street's median 12-month price target for Graco Inc. is $90.42, about 11.5% above its October 20 closing price of $81.09
The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 23 three months ago

Reuters Recommended Reads
Oct 20 - AI worries weigh on ABB shares despite record orders
Oct 20 - Switzerland's ABB Q3 revenue rises 14%, to form joint venture with Mitsubishi Electric

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)