Clarcor Q3 Profit Down, But Tops View; Cuts FY Outlook

(RTTNews) - Air filter maker Clarcor Inc. (CLC), Wednesday reported a drop in profit for the third-quarter, hurt mainly by lower gross margins and non-cash charges. Nevertheless, adjusted earnings for the quarter came in ahead of analysts' estimates by a penny, while revenues fell short.

Moving ahead, the company lowered its full-year earnings outlook citing headwinds in several filtration markets.

Franklin, Tennessee-headquartered Clarcor's third-quarter profit slipped to $28.7 million or $0.57 per share from $30.3 million or $0.60 per share last year.

Earnings for the quarter were impacted by two non-cash charges, a $4.6 million loss on disposal of equipment and a $3.1 million charge to account for a final pension obligation settlement.

Excluding special charges, adjusted earnings for the quarter rose to $0.67 per share from $0.60 per share a year ago. On average, six analysts polled by Thomson Reuters expected earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Clarcor, which makes air and fluid filters for engines and buildings, said sales for the third quarter edged up 1 percent to $289.1 from $286.7 million last year. Analysts expected sales of $298.74 million for the quarter.

Engine/filtration net sales rose 2 percent to $129.1 million, while industrial/environmental filtration division sales increased 1 percent to $139.7 million. Packaging segment dropped 5 percent to $20.3 million due to the expected sales decline in film packaging products in addition to lower flat sheet decorating activity.

Gross margin for the quarter dropped to 31.8 percent from 33.1 percent last year, while operating margin slipped to 14.5 percent from 16.1 percent.

Looking ahead to the full year, the company lowered its earnings outlook to a range of $2.35 to $2.45 per share from its previous guidance of $2.45 to $2.55 per share. Analysts currently expect full-year earnings of $2.52 per share.

Chief Executive Chris Conway said, "Although we expect continued growth in our core filtration markets in the fourth quarter, including projected 3% to 5% growth in our domestic heavy-duty engine filtration aftermarket and continued growth in our oil & gas business, we believe we will continue to experience top-line headwinds in several filtration markets."

CLC closed Wednesday's trading at $57.51, up $0.67 or 1.18%, on the NYSE. In after-hours trade, the stock fell $0.67 or 1.17%.