What: Shares of Colfax Corporation (NYSE:CFX), a leading global manufacturer of gas and fluid handling and fabrication products and services, are dropping 10% after the company announced its first-quarter financial results.
So what: During the first quarter, Colfax's adjusted net income dropped to $36.9 million, or $0.30 per share, compared to last year's first-quarter mark of $44.5 million, or $0.36 per share. Revenue dropped 3.8% to $876.8 million during the first quarter partly due to a decline in gas and fluid handling orders. Following the decline in revenue and adjusted net income was adjusted operating profit margin, which declined 140 basis points to 7.5% during the first quarter.
Overall, the results checked in slightly above analysts' estimates, but the year-over-year declines point to continued weakness in the company's end markets -- especially its oil, gas and petrochemical orders, which declined nearly 36% during the first quarter.
Now what: With continued weakness in the oil and gas industry, the company's top and bottom lines will likely continue to feel pressure. Further, the company is feeling pressure in its mining market, also, with sales down 34% in the first quarter and orders down 53%.
President and Chief Executive Officer Matthew Trerotola said in a press release:
We are pleased to report operating results that were in line with the expectations we discussed in December. We are making very good progress on our cost reduction initiatives, but our progress on growth initiatives continues to be largely offset by the choppy end market environment. While end market trends are mixed, solid performance in our shorter-cycle and aftermarket businesses is expected to largely offset the increased risk to project bookings for the balance of the year.