Myers Industries Q3 Adj. Profit Misses View, But Revenues Beat

(RTTNews) - Myers Industries Inc. (MYE), a maker of polymer products, on Tuesday reported an increase in profit for the third quarter from last year despite lower revenues and margins, while earnings per share were flat with the prior year.

However, adjusted earnings per share missed analysts' expectations, while revenues beat their estimates. Looking ahead, the company affirmed its outlook for fourth quarter and fiscal 2016 sales to decline in the mid-to-high single digits on a constant currency basis.

President and Chief Executive Officer Dave Banyard said, "Third quarter results were in line with our expectations as customers in both our Material Handling and Distribution segments continue to operate in a reduced capital spending environment."

The Akron, Ohio-based company's net income for the third quarter increased to $414 thousand from $333 thousand in the year-ago period. However, earnings per share were flat with the prior year at $0.01 per share.

Excluding items, adjusted income from continuing operations for the quarter were $0.04 per share, compared to $0.09 per share in the year-ago period.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 6.3 percent to $132.68 million from $141.66 million in the prior-year quarter. Wall Street expected revenues of $131.65 million for the quarter.

The reduction in sales was primarily the result of decreased capital spending in several of the company's key end markets and a decline in sales of retread products in the distribution segment.

Net sales in the material handling segment declined 2.8 percent, or 3.4 percent organic, from the prior year due primarily to declines in the food and beverage markets. Net sales in the distribution segment decreased 13 percent, primarily due to lower sales of equipment and tire retread products.

The company's gross profit margin decreased 230 basis points to 27.1 percent during the quarter, reflecting operational inefficiencies resulting from lower sales volumes and an unfavorable product mix.

Looking ahead, Myers affirmed its outlook for total revenue to decline in the mid-to-high single digits on a constant currency basis for both the fourth quarter and full year of 2016, primarily due to a continued weak capital spending environment. The Street expects revenues of $557.15 million for the year.