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DMC Global Cuts Q4 View on Dim Prospects for DynaEnergetics

Zacks Equity Research

DMC Global Inc. BOOM recently lowered its outlook for fourth-quarter 2019. Following the news, its shares declined 16.6% to eventually close at $43.65 on Tuesday, reflecting investors’ bearish sentiments regarding the latest guidance.

DMC Global impressed investors in third-quarter 2019, wherein its earnings surpassed the Zacks Consensus Estimate by 12.5%.

For the fourth quarter, the company anticipates its sales to lie in the range of $82-$86 million, lower than the previous guidance of $92-$97 million. As communicated by the company, the lower guidance was owing to steep fall in well completion activity in North America along with pricing pressure upsetting its oilfield products business — DynaEnergetics.

The company expects DynaEnergetics to report sales in the range of $62-$64 million for the fourth quarter of 2019 compared with $72-$75 million guided earlier. For its composite metals business, NobelClad, the company reiterated sales guidance of $20-$22 million.

For the fourth quarter, it currently anticipates adjusted EBITDA between $14 million and $15 million, lower than its earlier projection of $17.5 million to $20 million. Adjusted earnings view for 2019 has been decreased to $3.50-$3.60 per share, reflecting a 17.5-cent fall at the mid-point from its prior guidance.

Separately, the company’s board of directors approved payment of a quarterly cash dividend of 12.5 cents per share to shareholders on record as of Dec 31, 2019. The dividend will be paid out on Jan 15, 2020.

Year to date, this Zacks Rank #3 (Hold) company has gained 24.3%, outperforming the industry’s growth of 8.4%.

Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are Actuant Corporation EPAC, Brady Corporation BRC and SiteOne Landscape Supply, Inc. SITE. While Actuant sports a Zacks Rank #1 (Strong Buy), Brady and SiteOne Landscape carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Actuant surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 13.36%.

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DMC Global Inc. (BOOM) : Free Stock Analysis Report
 
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