Q: Hello 5i,
Please comment on EIF earnings. This company seems to make money compared to AC over the last 20 years (16 for EIF). Can this continue? Have it's debt ratios actually improved? Are they facing a cliff?
TIA,
Please comment on EIF earnings. This company seems to make money compared to AC over the last 20 years (16 for EIF). Can this continue? Have it's debt ratios actually improved? Are they facing a cliff?
TIA,
5i Research Answer:
We do think EIF is a better overall company than AC, and it is more diversified by business lines. EPS of 92c beat estimates of 91c; revenue of $720M missed estimates by 1.6%. EBITDA of $177M matched estimates. Four brokers raised target prices on the news. EPS rose 15%. Revenue rose 9%. EBITDA guidance was increased $35M to $725M to $765M. Payout ratio is quite acceptable at 63%. It was a solid quarter and outlook and the stock continues to gain traction. Debt ratios have improved this year, with lower net debt (by about $100M) and higher cash flow. EIF's earnings can be 'bouncy' at times, but we would expect steady gains over time to continue.