But in March, Enerpac or EPAC or Enerpac Tool Group was the first company to assimilate data to quantify the impact of the war on their business. The analysis pointed to the prevalence of headwinds, foreign exchange, and inflation. As a result, Enerpac Tool Group lowered its guidance for the entire year to a position below the projection of Marketbeat.com.
With no end to the ongoing war, the dollar gaining strength from the FOMC outlook about the interest rate, and oil prices reaching the $130 per barrel level, the picture is quite dismal for businesses. Moreover, unbridled inflation is posing a severe threat to the economy. Perhaps, more companies are likely to admit more specifically how the headwind harms the business prospects.
Enerpac – Impressive Q1 performance in 2022
The Enerpac tool group annual report for the year 2021 was quite encouraging. The company achieved net sales growth of 7% ($529 million), and the operating profit was 10% ($51 million) of net sales, an increase of 53% ($27 million) over the past year. As the effects of the pandemic subsided, the profitability started increasing. Consolidated net income was $40.2 million, and diluted EPS was $0.67. The company generated a free cash flow of $69 million, over 100%. It helped the company pay the debt of $80 million while having $140 million cash in hand. The company pledged to improve operational productivity and lower overhead cost.
The company kept up the excellent performance in the first quarter of 2022. Revenues and earnings growth were substantial in 2022 until the war progressed. Though not as bad as analysts expected, the company’s margins began shrinking. Consequently, the GAAP EPS stood at $0.03. The operation margin reduced to 12.4% from 13.4%, translating into EPS of $0.14, a penny more than the consensus targets and bettering last year’s figure by $0.06.
The Changing Outlook
Despite an excellent first quarter, the outlook for the Enerpac tool group is foggy, and we can get a clear picture only later in the year. The company’s revenue guidance of $560 is lower than the earlier projected $580. It might go down further if global hindrances keep increasing. The Enerpac share prices are falling.
The Enerpac tool group completed 30 years in the NYSE and is committed to providing best-in-class returns and long-term value to investors and customers. As part of Enerpac tool group investor relations programs, the company announced several measures to enhance shareholder value by driving growth and efficiency.
Despite the post-pandemic’s fast turnaround and posting good results, the poor outlook about Enerpac will likely reduce gains in the coming days. The share prices will unlikely touch the $22 level but could hover around $19 and $20 with proper support, which can fall to $18.
