Carlisle (CSL) Q3 Earnings & Revenues Surpass Estimates

Carlisle Companies Incorporated CSL reported impressive third-quarter 2021 results wherein both the bottom line and the top line surpassed the Zacks Consensus Estimate.

The company’s adjusted earnings were $2.99 per share, beating the consensus estimate of $2.73 by 9.5%. The bottom line increased 54.1% on a year-over-year basis supported by higher sales, partially offset by a rise in corporate expense.

Inside the Headlines

In the reported quarter, Carlisle’s revenues came in at $1,315.6 million, up 24.5% year over year. This increase was attributable to 19.4% rise in organic revenues, 4.8% benefit from acquired assets and a positive impact of 0.3% from changes in foreign exchange rates.

The top line surpassed the Zacks Consensus Estimate of $1,259 million by 4.5%.

The company reports results under three segments — Carlisle Construction Materials (“CCM”), Carlisle Interconnect Technologies (“CIT”) and Carlisle Fluid Technologies (“CFT”). The quarterly segmental results are briefly discussed below.

Revenues from CCM totaled $1,065.8 million, increasing 29.4% year over year. It represented 81% of the company’s revenues. Organic revenues grew 23.3% on the back of strong demand for U.S. commercial roofing, the Henry acquisition, and strength across all product lines.

CIT revenues, representing 13.6% of total revenues, were $178.7 million, up 6.1% year over year. The increase was driven by 5.2% growth in organic revenues on account of a rise in orders from aerospace and medical customers.

CFT revenues, representing 5.4% of total revenues, were $71.1 million, up 9.4% year over year. Organic revenues increased 6.3% on account of strength in its businesses in China and Europe, and solid price realization.

Carlisle Companies Incorporated Price, Consensus and EPS Surprise

Carlisle Companies Incorporated Price, Consensus and EPS Surprise

Carlisle Companies Incorporated price-consensus-eps-surprise-chart | Carlisle Companies Incorporated Quote

Operating Margin Details

In the reported quarter, Carlisle’s cost of sales increased 27.7% to $944 million. It represented 71.8% of net sales compared with 69.9% a year ago.

Selling and administrative expenses increased 25.9% to $192.6 million. It represented 14.6% of net sales compared with 14.5% in the year-ago quarter. Research and development expenses totaled $12.8 million, up 11.3%.

Operating income was $166.5 million, up 7.6% year over year while margin contracted 190 basis points to 12.7%. The company hiked its quarterly dividend rate by 3% in August 2021. In September, the company completed the acquisition of California-based Henry Company for $1.575 billion in cash.

Balance Sheet and Cash Flow

Exiting the third quarter, Carlisle had cash and cash equivalents of $295.6 million compared with $713.3 million at the end of previous quarter. Long-term debt (including current portion) was $2,926.4 million, up from $2,081.6 million sequentially.

In the first nine months of 2021, the company generated net cash of $283.9 million from operating activities compared with $440.2 million a year ago.

In the first nine months of 2021, the company rewarded shareholders with a dividend payout of $84.2 million. Amount spent on buying back shares totaled $290.6 million, down 15%.

Outlook

In 2021, Carlisle expects revenue growth in the mid-20% range for the CCM segment, driven by strength across U.S. commercial roofing market and the Henry acquisition. The CIT segment is expected to decline in the mid-single digit range while the CFT segment is likely to witness revenue growth in mid-teens on the back of strength in markets.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same space are Raven Industries, Inc. RAVN, Griffon Corporation GFF, and Danaher Corporation DHR. While Raven currently sports a Zacks Rank #1 (Strong Buy), Griffon and Danaher carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Raven delivered an earnings surprise of 42.59%, on average, in the trailing four quarters.

Griffon delivered an earnings surprise of 26.02%, on average, in the trailing four quarters.

Danaher delivered an earnings surprise of 25.29%, on average, in the trailing four quarters.

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