DXP Enterprises (NASDAQ:DXPE) Posts Quarterly Earnings Results, Misses Estimates By $0.12 EPS

Key Points

• DXP Enterprises missed quarterly estimates, reporting adjusted EPS of $1.26 versus expectations of $1.38 and revenue of $521.66 million versus the $531.0 million consensus.
• Operational performance was still solid, with sales up 9.5% year over year, gross margin improving to 32.3%, and free cash flow of $26.3 million. Management also said demand improved as the quarter progressed, with April sales running about 15% above last year.
• Growth in Innovative Pumping Solutions stood out, as segment sales jumped 37.7% to $111.7 million and backlogs in energy and water support multi-quarter visibility. However, higher SG&A costs and acquisition-related debt could weigh on near-term margins and financing costs.

DXP Enterprises (NASDAQ:DXPE - Get Free Report) issued its quarterly earnings results on Thursday. The industrial products company reported $1.26 earnings per share for the quarter, missing the consensus estimate of $1.38 by ($0.12), Zacks reports. The business had revenue of $521.66 million for the quarter, compared to the consensus estimate of $531.00 million. DXP Enterprises had a return on equity of 18.41% and a net margin of 4.27%.

Here are the key takeaways from DXP Enterprises' conference call:

• Q1 results showed strength with sales of $521.7M (+9.5% YoY), gross margin of 32.3% (+79 bps), adjusted EBITDA of $57.8M (11.1%), adjusted EPS of $1.26, and $26.3M of free cash flow.
• Innovative Pumping Solutions led growth with sales up 37.7% to $111.7M and sturdy backlogs in energy and water that management says provide multi-quarter revenue visibility.
• Sales accelerated through the quarter after a weak January (daily sales Jan $7.2M → Feb $8.4M → Mar $9.2M; April ~ $9.0M and +15% YoY), signaling improving demand into Q2.
• SG&A rose by $16.1M to $126.1M (24.2% of sales) due to discrete items—healthcare, legal/audit and other one-time costs—which could pressure near-term margins until they normalize.
• Balance sheet activity included $844.7M of total debt, a $90.4M decline in cash to $213.4M to fund three acquisitions, higher working capital and $1.8M more interest expense, increasing leverage and near-term financing costs despite ample liquidity.

DXP Enterprises Stock Up 4.1%

Shares of NASDAQ:DXPE traded up $6.16 during trading on Friday, hitting $156.18. 202,115 shares of the company were exchanged, compared to its average volume of 224,695. The stock has a market cap of $2.42 billion, a price-to-earnings ratio of 29.19 and a beta of 1.07. DXP Enterprises has a fifty-two week low of $75.58 and a fifty-two week high of $183.91. The firm has a fifty day moving average price of $147.76 and a two-hundred day moving average price of $127.54. The company has a current ratio of 3.34, a quick ratio of 2.94 and a debt-to-equity ratio of 1.64.

Analyst Ratings Changes

A number of analysts have recently commented on DXPE shares. Zacks Research raised shares of DXP Enterprises from a "hold" rating to a "strong-buy" rating in a research report on Thursday, March 12th. Wall Street Zen raised shares of DXP Enterprises from a "hold" rating to a "buy" rating in a research report on Saturday, March 28th. Finally, Loop Capital set a $154.00 price objective on shares of DXP Enterprises in a research report on Monday, March 2nd. One equities research analyst has rated the stock with a Strong Buy rating and two have assigned a Buy rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Buy" and an average price target of $154.00.

Insider Buying and Selling at DXP Enterprises

In other DXP Enterprises news, Director Joseph R. Mannes sold 1,500 shares of the business's stock in a transaction that occurred on Monday, March 9th. The stock was sold at an average price of $137.95, for a total transaction of $206,925.00. Following the transaction, the director owned 13,964 shares of the company's stock, valued at $1,926,333.80. The trade was a 9.70% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 22.70% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the stock. EverSource Wealth Advisors LLC increased its position in shares of DXP Enterprises by 3,507.7% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 469 shares of the industrial products company's stock worth $41,000 after purchasing an additional 456 shares during the last quarter. State of Wyoming acquired a new position in shares of DXP Enterprises during the 4th quarter worth approximately $152,000. Royal Bank of Canada increased its position in shares of DXP Enterprises by 142.8% during the 4th quarter. Royal Bank of Canada now owns 1,408 shares of the industrial products company's stock worth $155,000 after purchasing an additional 828 shares during the last quarter. Tower Research Capital LLC TRC increased its position in shares of DXP Enterprises by 498.7% during the 2nd quarter. Tower Research Capital LLC TRC now owns 1,802 shares of the industrial products company's stock worth $158,000 after purchasing an additional 1,501 shares during the last quarter. Finally, Creative Planning acquired a new position in shares of DXP Enterprises during the 3rd quarter worth approximately $215,000. Institutional investors and hedge funds own 74.82% of the company's stock.

About DXP Enterprises

DXP Enterprises, Inc is a Houston, Texas–based industrial products and services distributor serving customers across North America. The company provides a broad portfolio of maintenance, repair and operations (MRO) supplies, including fluid power components, safety products, mechanical power transmission parts, and instrumentation. DXP's product offering spans well-recognized private brands as well as equipment and parts from leading global manufacturers, enabling clients in energy, heavy industrial and manufacturing sectors to source critical components from a single supplier.

Through its network of service centers and specialized repair facilities, DXP delivers inventory management programs, turnkey fluid power rebuilds and custom assembly solutions.

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