Earnings stock to watch: HD Supply Holdings Inc (NASDAQ: HDS)

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HD Supply Holdings Inc (NASDAQ: HDS) stock rose over 0.30% in the pre market session of 11th December, 2019 (as of 8:51 am GMT-5; Source: Google finance) as the company posted better than expected  earnings for the third quarter of FY 19.

The company reported 9.8% decline in the adjusted net income to $166 million for the third quarter of fiscal 2019, as compared to $184 million for the third quarter of fiscal 2018. HDS in the third quarter of FY 19 has reported the adjusted earnings per share of $1.01, beating the analysts’ estimates for the adjusted earnings per share of $1, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 2 percent to $1.64 billion in the third quarter of FY 20, which is in line with the analysts’ estimates for revenue of $1.64 billion. The gross margin was down 10 basis points to 38.9% from the third quarter of 2018. Adjusted EBITDA for the third quarter of 2019 was $247 million, which represents a decline of $1 million or less than 1% from the third quarter of 2018.

Moreover, Facilities Maintenance gross margins fell by 20 basis points for the third quarter of 2018, driven the margin rate pressures from tariffs. The company We expect Facilities Maintenance gross margin rate to be down approximately 40 basis points to 50 basis points for the full-year of 2019. Facilities Maintenance adjusted EBITDA for the third quarter of 2019 was $149 million flat from the third quarter of 2018.

Net sales for the Construction and Industrial business increased by 1.9% to $818 million during the third quarter of 2019. Construction and Industrial gross margins were flat year-over-year, while adjusted EBITDA for the third quarter of 2019 was $98 million, down $1 million from the third quarter of 2018.

During the third quarter of 2019, the company had repurchased approximately 6.2 million shares of common stock for a total of $240 million at an average price of $38.39.

For the fourth quarter ending in January, HD Supply expects its per-share earnings to range from 52 cents to 58 cents. The company expects revenue to be in the range of $1.36 billion to $1.41 billion for the fiscal fourth quarter. HD Supply expects full-year earnings to be in the range of $3.45 to $3.51 per share, with revenue ranging from $6.12 billion to $6.17 billion.

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