Stock Earnings Roundup: CLARCOR Inc. (NYSE:CLC)

CLARCOR Inc. (NYSE:CLC) reported earnings for the three months ended May 2016 on June 15, 2016. The company earned $0.73 per share on revenue of $364.97M. Analysts had been modeling earning per share of $0.68 with $356.29M in revenue.

CLARCOR Inc. (NYSE:CLC) reported that its second quarter diluted earnings per share were $1.09, a $0.33 increase from the second quarter of 2015. Higher diluted earnings per share were driven by a $0.37 per diluted share benefit from the patent litigation award received in the second quarter of 2016 offset by an approximate $0.02 reduction from upfront expenses for cost reduction initiatives incurred in the second quarter of 2016 and an approximate $0.02 reduction from the disposition of the packaging business, J.L. Clark, which was sold in June 2015.

2016 Guidance

We are maintaining our consolidated diluted earnings per share guidance between $2.60 and $2.80 and our consolidated net sales guidance between $1,375 million and $1,415 million. We are reducing our consolidated operating margin guidance range from 14.1% to 14.7% in our previous guidance to the range of 13.9% to 14.5%. Our 2016 diluted earnings per share guidance does not include costs that we may incur in 2016 related to any potential facility consolidations or any other restructuring or cost savings initiatives (including the $2.1 million in upfront expenses from cost reduction initiatives incurred in the first six months of 2016) or the $27.3 million patent litigation award received in the second quarter of 2016.

Consolidated sales guidance for 2016 remains unchanged from our previous guidance. However, the composition of expected 2016 net sales between our two reporting segments has shifted from our previous guidance. We have increased our sales guidance for our Engine/Mobile Filtration segment by approximately $6 million, or 1.0%, at the mid-point primarily due to higher expectations for second half sales in several international markets. We have lowered our sales guidance for our Industrial/Environmental Filtration segment by approximately $6 million, or 0.8%, at the mid-point, primarily due to anticipated continued pressures in our natural gas filtration market and recent headwinds in some of our industrial liquid filtration markets, which we anticipate will be partially offset by improved sales expectations in our HVAC filtration markets. Due to the sales mix shift from higher margin natural gas and industrial liquid filtration markets to the lower margin HVAC filtration market, our expected full year operating margin for the Industrial/Environmental Filtration segment was lowered from our previous guidance at the mid-point by approximately 0.3 percentage points. Our expected full year operating margin guidance for the Engine/Mobile Filtration segment has remained unchanged.

Our 2016 earnings guidance includes approximately $7.0 million of net interest and other expense. We project 2016 cash from operations to be between $200 million and $220 million (excluding after-tax proceeds from the patent litigation award). We expect capital expenditures to be between $45 million and $55 million, our effective tax rate to be between 30.8% and 31.2%, and 49.0 million average diluted shares outstanding.

CLARCOR Inc. earnings per share showed a decreasing trend of -5.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 290%.Analysts project EPS growth over the next 5 years at 8.8%. It has EPS annual growth over the past 5 fiscal years of 7.3% when sales grew 7.9. It reported -8.7% sales drop, and 43.8% EPS growth in the last quarter.

The stock is trading at $61.35, up 40.23% from 52-week low of $44.13. The stock trades down -0.77% from its peak of $62.84 and % below the consensus price target of $59.33. Its volume clocked up at 0.35 million shares which is higher than the average volume of 0.25 million shares. Its market capitalization currently stands at $2.95B.

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