GCP Applied Technologies Inc (NYSE: GCP) stock rose over 6% on May 11th, 2018 (as of 11:12 AM GMT-4; Source: Google finance) driven by the better outlook. For 2018, the group forecasts a sales growth of 5% to 10% driven by ongoing healthy global construction market, strong customer activity, and a better project pipelines. The group is focusing on better margins in both SCC and SBM through price capture, freight surcharges, and productivity. Their adjusted EBIT is expected to be in the same range at $135 million to $150 million. They enhanced the adjusted EPS guidance to be in the range to $0.15 for the partial year savings from the refinancing transaction.
GCP’s consolidated revenues rose 8% on a yoy basis to $243 million during the quarter while rose 4% without acquisitions. SCC sales rose 7% driven by a higher sales to admixture customers in North America and EMEA, coupled with the acquisition of Ductilcrete in North America. VERIFI installed units surged 40% on a yoy basis during the quarter. SBM’s revenue rose 10% yoy while, Building Envelope sales rose 20% and rose 8% without acquisitions contribution. Residential sales rose 9% on a yoy basis. The group is providing materials for a several infrastructure projects, which would contribute to continued revenue growth in SBM.
GCP in North America revenues rose 10% during the quarter while EMEA surged 18% and 7% organically. In Asia Pacific, revenues fell 4% as growth in their cement business was offset by a fall in admixtures on the back to share loss last year. Latin America rose 2% overall but the region delivered a better growth at double-digit rates, excluding Venezuela. Mexico performance strength was ongoing with Brazil rising over 3% year-over-year.
SBM segment operating income surged 19% on the back of the better sales volume, rising gross profit, coupled with cost savings related with their restructuring program. The Adjusted free cash flow was also negative at 16 million, against a negative 39 million from pcp. Better earnings coupled with receivable collections post a solid fourth quarter.