Griffon Corp. Reports Decline in Q4 Profit, Surpassing Expectations
Fourth Quarter Earnings: Griffon Corp. reported a fourth-quarter profit of $43.64 million, down from $62.49 million the previous year, but exceeded analysts' expectations.
Adjusted Earnings: The company posted adjusted earnings of $70.87 million, or $1.54 per share, surpassing the average analyst estimate of $1.51 per share.
Revenue Growth: Revenue for the quarter increased by 0.4% to $662.18 million compared to $659.67 million in the same period last year.
Earnings Summary: Key figures include earnings of $43.64 million, EPS of $0.95, and revenue of $662.18 million, reflecting a decline in earnings but stable revenue performance.
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Low-Cap Industrial Stocks Face Weak EPS Revisions
- EPS Revision Analysis: As the earnings season approaches, several mid to low-cap industrial stocks have received an 'F' grade for earnings momentum, indicating significant downward pressure on analyst expectations for future earnings.
- Affected Companies: Companies such as Alight (ALIT), Alaska Air Group (ALK), and Apogee Enterprises (APOG) have all received an 'F' grade, highlighting severe challenges to their earnings outlook.
- Market Reaction Expectations: These companies may face cautious investor sentiment due to factors like heavy debt and high customer churn rates, which could negatively impact their stock performance.
- Industry Outlook: Despite the current poor EPS revision grades, the market remains optimistic about the industrial sector's prospects for 2026, potentially providing support for future investment opportunities.
Reasons to Steer Clear of Griffon Stock at This Time
Operational Performance: Griffon Corporation (GFF) has underperformed due to weakness in its Consumer and Professional Products (CPP) segment, rising operational costs, and high debt levels, leading to a Zacks Rank of #5 (Strong Sell).
CPP Segment Challenges: The CPP segment has seen an 8% revenue decline year-over-year, primarily due to reduced consumer demand and increased tariffs affecting customer orders.
Rising Expenses and Debt: The company faces increasing selling, general, and administrative expenses, which rose 3.6% in the last fiscal quarter, alongside a long-term debt of $1.40 billion, raising concerns about its financial stability.
Foreign Currency Risks: Griffon is exposed to currency translation risks due to its international operations, with a stronger U.S. dollar potentially impacting its overseas business results in the near future.
