Mueller Water Products Inc (NYSE:MWA) stock rose 4.98% (As on December 14, 11:26:31 AM UTC-4, Source: Google Finance) after the company tops estimates for both topline and bottom-line of the fourth quarter of FY 23. Operating income increased $13.3 million, or 114.7 percent, to $24.9 million as compared with $11.6 million in the prior year quarter, as benefits from higher pricing and lower SG&A expenses more than offset lower volumes and higher costs associated with warranty obligations. Operating income margin was 8.3 percent as compared with 3.5 percent in the prior year quarter. During the quarter, the Company incurred $9.3 million of strategic reorganization and other charges and a $5.7 million warranty charge at Water Management Solutions, which have been excluded from adjusted results. The strategic reorganization and other charges primarily consisted of expenses associated with the previously announced leadership transition, and restructuring costs. Adjusted EBITDA of $55.4 million increased $16.8 million, or 43.5 percent, as compared with $38.6 million in the prior year quarter. Adjusted EBITDA margin improved to 18.4 percent as compared with 11.6 percent in the prior year quarter.

MWA in the fourth quarter of FY 23 has reported the adjusted earnings per share of 19 cents, beating the analysts’ estimates for the adjusted earnings per share of 14 cents. The company had reported 9.1 percent decline in the adjusted revenue to $301.4 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $284.73 million. The decrease in net sales was driven by lower volumes partially offset by higher pricing. Water Flow Solutions’ net sales for the 2023 fourth quarter decreased $17.9 million, or 10.0 percent, to $161.5 million as compared with $179.4 million in the prior year quarter. Water Management Solutions’ net sales for the 2023 fourth quarter decreased $12.1 million, or 8.0 percent, to $139.9 million, as compared with $152.0 million in the prior year quarter.

The Company anticipates that channel and customer inventory levels will be substantially normalized by the end of the first quarter of fiscal 2024. At the end of fiscal 2023, iron gate valve and hydrant backlogs were normalized, while the backlog for service brass products remained elevated. For the current quarter ending in December, Mueller Water Products expects revenue to be in the range of $245 million to $255 million, versus the analyst consensus of $266 million.