Bullish stock to watch: Brady Corp (NYSE: BRC)

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Brady Corp (NYSE: BRC) stock surged 8.80% on September 13th, 2018 and continued its bullish momentum on September 14th, 2018 (as of 11:07 AM GMT-4; Source: Google finance) after the company posted better than expected results for the fourth quarter 2018. Net earnings for the quarter ended July 31, 2018, were $35.0 million compared to $25.2 million in the same quarter last year.  The sale of the Runelandhs business increased net earnings by $4.7 million in the fourth quarter of fiscal 2018.

Bullish stock to watch: Brady Corp (NYSE: BRC)

BRC in the fourth quarter of FY 18 has reported the adjusted earnings per share of 66 cents, beating the analysts’ estimates for the adjusted earnings per share of 52 cents. The company had reported the adjusted revenue growth of 2.9 percent to $297.5 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $297.04 million. There is an organic revenue growth of 2.5 percent and an increase of 1.0 percent from foreign currency translation, partially offset by a decrease of 0.6 percent from the sale of the Runelandhs business.

Moreover, the healthcare product line is still challenged. The company’s WPS business reported its second consecutive quarter of organic sales growth, with an increase of 3% in the fourth quarter. The increase in sales was led by the Australian business which grew sales organically in the high-single-digits. The European business continues to be a strong and grew sales in the quarter in the mid-single-digits. This business has consistently increased sales for the past four years and continues to lead the WPS division’s improved financial performance. Organic sales in the North American business declined slightly this quarter, after reporting organic sales growth last quarter. By segment, sales increased 3.1 percent in Identification Solutions and 2.3 percent in Workplace Safety, which consisted of organic sales growth of 2.4 percent in Identification Solutions and 3.0 percent in Workplace Safety. R&D expense was $11.7 million, which was an increase of 6.3% over last year’s fourth quarter.

For FY 19, BRC expects organic sales growth to range from 2.0 percent to 4.0 percent for the year ending July 31, 2019.  Brady expects earnings per diluted Class A Nonvoting Common Share to range from $2.15 to $2.25. The company expects to achieve efficiency gains in its manufacturing facilities and in selling, general and administrative expenses while continuing to increase investments in research and development.  Capital expenditures are expected to be approximately $35 million during the year ending July 31, 2019.

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