The Weir Group (LON:WEIR) Issues Quarterly Earnings Results

Key Points

• Orders rose 8% year over year on a constant-currency basis, with a 1.12 book-to-bill ratio and about £150 million added to the order book, supporting management’s full-year guidance.
• First-half operating margin was 18.8%, but Weir expects margins to exceed 20% for the full year as production-transfer pressures ease and its £90 million cost-savings program is completed.
• Free cash-flow conversion weakened to 41% and net debt-to-EBITDA increased to 2.2 times due to working-capital and acquisition-related pressures, although management expects improvement by year-end.

The Weir Group (LON:WEIR - Get Free Report) announced its quarterly earnings data on Wednesday. The company reported GBX 54.60 earnings per share for the quarter, Digital Look Earnings reports. The Weir Group had a return on equity of 13.42% and a net margin of 9.63%.

Here are the key takeaways from The Weir Group's conference call:

• Orders increased 8% year over year on a constant-currency basis, with Q2 acceleration, a 1.12 book-to-bill ratio, and approximately £150 million added to the order book. Management said this provides strong momentum for the second half and supports full-year guidance.
• First-half operating margin was 18.8%, pressured by product mix and production-transfer delays, but management expects those headwinds to reverse and margins to exceed 20% for the full year as the £90 million Performance Excellence savings program is completed.
• Free operating cash conversion fell to 41% and net debt to EBITDA rose to 2.2 times, reflecting higher inventory, delayed customer collections, production transfers, and acquisition-related interest costs. Weir expects working capital to unwind and leverage to move back toward its target range by year-end.
• Weir reported continued market-share gains and strong technology traction, including more than 90% success in competitive pump trials, 10 orders for its new Optimil vertical stirred mills, and Micromine annual recurring revenue growth expected above 25%.
• Andrew Neilson will become CEO next week, succeeding John, who leaves after a decade focused on transforming Weir into a mining technology company spanning engineered hardware and software.

The Weir Group Price Performance

Shares of The Weir Group stock traded up GBX 194 during trading on Wednesday, reaching GBX 2,718. The company's stock had a trading volume of 7,494,205 shares, compared to its average volume of 9,455,263. The business has a 50 day moving average price of GBX 2,435.61 and a 200-day moving average price of GBX 2,823.47. The Weir Group has a 12-month low of GBX 2,254 and a 12-month high of GBX 3,580. The company has a market capitalization of £7.06 billion, a P/E ratio of 28.58, a price-to-earnings-growth ratio of 2.59 and a beta of 1.07. The company has a quick ratio of 1.16, a current ratio of 2.05 and a debt-to-equity ratio of 93.56.

Insider Activity at The Weir Group

In related news, insider Penelope Anne Freer bought 900 shares of the firm's stock in a transaction on Wednesday, July 29th. The shares were bought at an average cost of GBX 2,729 per share, for a total transaction of £24,561. Insiders own 0.73% of the company's stock.

Wall Street Analyst Weigh In

WEIR has been the topic of several analyst reports. Jefferies Financial Group reaffirmed a "buy" rating and issued a GBX 3,555 target price on shares of The Weir Group in a report on Wednesday. Citigroup cut shares of The Weir Group to a "buy" rating in a report on Friday, July 10th. Panmure Gordon raised The Weir Group to a "buy" rating and set a GBX 3,490 target price for the company in a report on Friday, May 1st. Shore Capital Group reiterated a "hold" rating on shares of The Weir Group in a research note on Thursday, April 30th. Finally, JPMorgan Chase & Co. raised their price target on The Weir Group from GBX 3,500 to GBX 3,800 and gave the stock an "overweight" rating in a report on Wednesday, June 24th. Eight investment analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company's stock. Based on data from MarketBeat, The Weir Group presently has a consensus rating of "Moderate Buy" and a consensus price target of GBX 3,435.33.

About The Weir Group

The Weir Group PLC produces and sells highly engineered original equipment worldwide. It operates in two segments, Minerals and ESCO. The Minerals segment offers engineering, manufacturing, and service processing technology for the use in abrasive high-wear mining applications; and differentiated technology for the use in infrastructure and general industrial markets. The ESCO segment provides ground engaging tools for large mining machines. This segment also offers cloud-based Artificial Intelligence solutions to the mining industry; manufactures and distributes highly engineered wear parts; and offers aftermarket services to the mining industry.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.