Bullish stock to watch: Gardner Denver Holdings Inc (NYSE: GDI)

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Gardner Denver Holdings Inc (NYSE: GDI) stock rose over 0.8% on 18th Feb, 2020 (As of 10:48 am GMT-5; Source: Google finance). GDI in the fourth quarter of FY 19 has reported the adjusted earnings per share of 37 cents, beating the analysts’ estimates for the adjusted earnings per share of 34 cents. The company had reported 14 percent decline in the adjusted revenue to $606 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $595.7 million. In the fourth quarter, the Industrials segment has reported flat revenue growth and the orders declined by 3%.

The company reported 35% fall in the adjusted net income to $77 million, compared to $119 million, in the prior year. The company delivered 29% decrease in the Adjusted EBITDA to $135 million compared to the prior year, and Adjusted EBITDA as a percentage of revenues ended at 22.3%. In the fourth quarter, GDI has generated $99 million of cash flow from operating activities and invested $9 million in capital expenditures, which resulted in free cash flow of $90 million, compared to $126 million in the prior year.

For fiscal 2020, the company anticipates the market conditions to be mostly in line with the market at the end of 2019. The company expects the Industrial segment growth to be flat to down low single digits. The upstream Energy is expected to be down about 20% on the back of lower forecasted capital spending from our customers and decreased well completion activity. The mid and downstream Energy and Medical businesses are projected to perform comparatively better. Therefore, the company is expecting low single digit revenue declines across the total company with FX expected to be relatively flat to prior year levels. For full year 2020, the company expects Adjusted EBITDA to be in the range of $540 million to $570 million. 2020 free cash flow is expected to be within a range of $280 million to $300 million and free cash flow to reported net income conversion is expected to be more than 100%. The guidance for 2020 does not include any expected total year impact from the Coronavirus outbreak. China is a relatively small percentage of the company’s overall revenue base and while the company is expecting to see shipment deferrals in the first quarter, the company currently expects the revenue to shift to the remainder of the year.

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