Thermal management products and components maker Modine Manufacturing Co. (MOD) Tuesday reported a turnaround to profit in its fourth quarter, reflecting higher sales volumes and improved margins. The company also initiated earnings guidance for fiscal 2012 and said it expects sales growth of 12 to 16 percent.
In the fourth quarter, the company posted net earnings of $12.3 million or $0.26 per share, compared to a net loss of $11.25 million or $0.24 per share reported last year.
On average, four analysts polled by Thomson Reuters expected the company to earn $0.16 per share for the quarter. Analysts' estimates typically exclude special items.
The company said it has revised its prior period results to reflect the correction of errors which are immaterial to prior periods, but too significant to correct in the fourth quarter of fiscal 2011.
Net sales grew 22 percent to $396.76 million from $324.77 million in the same quarter last year, which also exceeded analysts' estimate of $379.33 million.
Modine noted that Asia revenues continued to grow through new product launches in China and India and sales increased 127 percent from the prior year's fourth quarter. Asia segment gross margin improved to 9.4 percent from 2.5 percent a year ago.
Group gross margin increased 100 basis points over the prior year to 15.1 percent.
Commenting on the results, Thomas Burke, president and chief executive officer of the company said, "This quarter was impacted by several unusual items, yet the underlying businesses continued their upward momentum....While there is still work to do, we remain focused on achieving our goals and remain on the path to achieve our objective of 11 to 12 percent return on average capital employed by the end of fiscal 2013."
Looking ahead to fiscal 2012, the company expects earnings per share to be in the range of $0.95 to $1.05. Modine expects a 12 to 16 percent increase in sales for the fiscal. Analysts expect the company to earn $1.05 per share, on revenues of $1.64 billion.
MOD is currently trading at $14.57, up $0.52 or 3.7 percent on a volume of 48 thousand shares.
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