JSL SA :JSLGY-US: Earnings Analysis: Q4, 2016 By the Numbers : March 29, 2017

JSL SA reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of JSL SA – Park-Ohio Holdings Corp. and ModusLink Global Solutions, Inc. (PKOH-US and MLNK-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 536.27 million, Net Earnings of USD -46.07 million.
  • Gross margins narrowed from 17.97% to 17.70% compared to the same period last year, operating (EBITDA) margins now 13.92% from 18.86%.
  • Year-on-year change in operating cash flow of 223.81% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 536.27 535.61 500.97 402.89 400.62
Revenue Growth (%YOY) 33.86 27.61 3.31 -15.73 -28.53
Earnings (mil) -46.07 -8.36 -4.94 2.92 1.77
Earnings Growth (%YOY) -2701.42 -471.84 -245.94 -59.91 -81.19
Net Margin (%) -8.59 -1.56 -0.99 0.73 0.44
EPS -0.43 -0.08 -0.05 0.03 0.02
Return on Equity (%) -87.97 -14.03 -8.33 4.79 2.74
Return on Assets (%) -6.72 -1.21 -0.77 0.5 0.33

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Market Share Versus Profits

Revenues History
Earnings History

JSLGY-US‘s change in revenue this period compared to the same period last year of 33.86% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that JSLGY-US is holding onto its market share. Also, for comparison purposes, revenues changed by 0.12% and earnings by -451.09% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 17.97% to 17.70%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 18.86% to 13.92% in this time frame. For comparison, gross margins were 18.58% and EBITDA margins were 17.62% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

JSLGY-US‘s change in operating cash flow of 223.81% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 10.10% to 5.74% and (2) one-time items that contributed to a decrease in pretax margins from 0.34% to -11.41%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

JSL SA provides logistics solutions and services. It operates through the following segments: Logistics, Concessionaires, Rental, and Financial. The Logistics segment provides road transportation of cargo, public transport, collection and transportation of household, commercial or industrial waste, leasing of machinery, new and used equipment and vehicles, and river transportation of cargo. The Concessionaires segment operates in the sale of light and heavy vehicles, the resale of vehicles, parts, machines and accessories, and the provision of mechanics, bodywork and painting, and insurance brokerage. The Rental segment operates in rental of light vehicles. The Financial segment offers financial and/or operating leasing for the acquisition of vehicles and equipment. The company was founded by Julio Simões in 1956 and is headquartered in Sao Paulo, Brazil.

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