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Image: Mistras.

Collateral damage from the plunge in crude oil prices continues to ripple outward beyond the energy sector, and industrial-equipment testing specialist Mistras Group (NYSE:MG) has already seen some of the negative impacts of the turmoil in the energy sector hit its business. Coming into Wednesday afternoon's fiscal fourth-quarter financial report, Mistras Group investors had hoped that the company would be able to eke out slight gains in revenue and net income despite those adverse conditions. Yet the company's results ended up including a slight decrease in overall sales, and profits didn't live up to their full potential either. Let's take a closer look at how Mistras Group did to close out its fiscal year and whether a recovery is in sight for the company down the road.

Mistras Group takes a sales tumble
Mistras Group once again fell short of what investors following the stock had wanted to see over the past quarter. Revenue fell 2.5% to $174.7 million, which was markedly worse than the nearly 4% growth that most investors had expected. Mistras took an even bigger hit in its GAAP earnings, with net income falling by nearly two-thirds to $2.2 million. After making allowances for one-time charges related to its realignment efforts, Mistras managed to post adjusted earnings of $0.20 per share, but that was still $0.02 less than the consensus forecast.

As we saw last quarter, acquisitions drove Mistras Group's sales results, helping to cushion the blow from weak organic growth and adverse foreign exchange impacts. The services segment actually saw sales climb by almost 5%, helped by a nearly 10 percentage point boost from acquisition-related revenue. Internationally, though, revenue plunged 24%, with the vast majority of the decline coming from the strong dollar. Products and systems also suffered a big organic revenue decline of 19%, reversing success in the previous quarter.

Overall, the fourth quarter ended what otherwise might have been a reasonably solid year on a poor note. For the full 2015 fiscal year, Mistras grew its revenue by 14%, with organic growth of more than 4% helped by strategic purchases. The services segment posted especially strong results, with internal growth of more than 6% and overall gains of 22%.

Can Mistras Group bounce back in fiscal 2016?
CEO Sotirios Vahaviolos once again noted the impact of falling oil prices and ongoing labor problems at client refineries hurting the company's growth. Yet even though results in North America generally met expectations, Mistras didn't perform well internationally, and although the strong dollar played a clear role, Vahaviolos also noted that "market conditions were also softer than we expected, particularly in Russia and Brazil, and our utilization of billable service technicians suffered in these and other markets."

Still, Mistras is working to make sure it can recover in the coming year. The company has talked extensively with customers to meet their needs, in particular looking for ways to cut spending and still get as much value as possible. That in part drove the decision to sell of its international subsidiaries in Russia and Japan, as well as realigning its internal structure in the services segment and cutting jobs and other costs in some of its remaining international businesses.

Mistras also gave guidance for fiscal 2016 that reflects ongoing difficult conditions. It expects sales to come in between $710 million and $725 million, which would be flat to up slightly from final 2015 figures. Slight increases from both organic growth and acquisitions should offset pressure from currency issues, and the company expects adjusted operating earnings of between $72 million and $78 million, which would work out to growth of between 1% and 9%.

Mistras investors accepted the news with some concern, as the stock dropped 2% in the first hour and a half of after-market trading following the announcement. At this point, investors can only hope that Mistras Group's efforts to contain costs and focus on its most successful businesses will pay off in the long run. With energy's fate still far from certain, though, a recovery could take a lot longer than Mistras investors would like.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Mistras Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.