Shares of Clarcor, Inc. (CLC) dropped 7 percent in expended trading on Wednesday after the filtration and packaging product maker reported profit and revenue for the second quarter that missed analysts' expectations, and trimmed its full-year 2012 earnings guidance. However, the company's profit edged up on improved margins and lower expenses.
"Although our second quarter earnings were the second highest in Company history, we experienced softer demand in several of our geographic and product markets. We believe most of this softer demand was influenced by generally uncertain economic activity," CEO Chris Conway said in a statement.
The Franklin, Tennessee-based company reported net earnings of $32.9 million or $0.65 per share for the second quarter, edging up from $32.8 million or $0.64 per share in the prior-year quarter.
On average, seven analysts polled by Thomson Reuters expect the company to report earnings of $0.70 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter edged down 1 percent to $284.86 million from $288.53 million in the same quarter last year, and missed five Wall Street analysts' consensus estimate of $305.68 million.
Changes in average foreign currency exchange rates negatively impacted net sales by 1 percent.
Net sales at engine/mobile filtration segment edged down less than 1 percent, while industrial/environmental filtration segment sales increased 1 percent from last year. Packaging segment sales declined 18 percent for the quarter.
"Despite this slowing industry demand, we believe we have maintained or increased our market share through the first six months of 2012 as we have added net independent distributors," Conway stated.
Operating margin for the quarter improved 30 basis points to 17.2 percent from last year's 16.9 percent. The company gross margin of 34.5 percent was consistent with last year, and was the company's highest second quarter gross margin percentage in the last twenty years. Selling and administrative expenses as a percentage of net sales declined 30 basis points.
"Although conditions for the remainder of the year are uncertain, we believe our customer relationships remain strong, and we are well-positioned to capitalize on China's projected long-term heavy-duty engine filtration growth across all products and markets including first-fit and the aftermarket," Conway added.
Looking ahead to fiscal 2012, the company trimmed its earnings guidance to a range of $2.50 to $2.65 per share from its previous forecast in the $2.55 to $2.70 per share range. The company also slashed its sales growth outlook for the year to a range of 3.0 to 5.0 percent, from the prior range of 5.5 to 7.5 percent.
Street is currently looking for full-year 2012 earnings of $2.68 per share, on annual revenues of $1.20 billion.
CLC closed Wednesday's regular trading session at $50.43, down $0.63 or 1.23% on a volume of 0.15 million shares. The stock lost a further $3.54 or 7.01% in after-hours trading.
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