CSW Industrials' stock plummeted 5.41% during intraday trading on Tuesday, as investors reacted to the company's fourth-quarter earnings report that showed a significant decline in GAAP profitability despite revenue exceeding estimates.
The industrial company reported GAAP earnings per share of $1.22 for the fiscal fourth quarter, representing a 41.1% decrease from $2.08 in the same period last year. Net income attributable to CSW fell 42.4% to $20.2 million, driven primarily by higher interest expense and a non-cash impairment charge related to the planned exit of the Greco business line.
While CSW reported record quarterly revenue of $309.0 million, beating analyst estimates of $300.6 million, and adjusted EPS of $3.14 that exceeded the $2.41 consensus estimate, the substantial year-over-year decline in GAAP earnings and the impairment charges weighed on investor sentiment. The company's interest expense increased significantly due to debt taken on for recent acquisitions and share repurchases.
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