NEW YORK (TheStreet) -- Mueller Water Products (MWA - Get Report) rose 6.95% to $8.93, up 58 cents from its previous close of $8.35, at the close of the trading day on Wednesday after the fire hydrant, pipe fitting and valve manufacturer announced first-quarter earnings that beat analysts' expectations.
Net sales increased to $257.4 million from $245.1 million in the same period a year ago. This beat analysts' revenue estimate of $256.25 million for the quarter.
The company also noted a decline in profits to $1.1 million, or one cent a share, from $7 million, or four cents a share, in the same period one year earlier. This just beat the expectations of analysts polled by Thomson Reuters, who expected Mueller to break even per share in the first quarter.
For more information on MWA's earnings, click here.
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TheStreet Ratings team rates MUELLER WATER PRODUCTS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MUELLER WATER PRODUCTS INC (MWA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 19.1%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MUELLER WATER PRODUCTS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MUELLER WATER PRODUCTS INC turned its bottom line around by earning $0.22 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.22).
- 35.33% is the gross profit margin for MUELLER WATER PRODUCTS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.60% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Machinery industry and the overall market, MUELLER WATER PRODUCTS INC's return on equity is below that of both the industry average and the S&P 500.
- Currently the debt-to-equity ratio of 1.83 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, MWA has managed to keep a strong quick ratio of 1.65, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: MWA Ratings Report