SEACOR Holdings, Inc. :CKH-US: Earnings Analysis: Q3, 2017 By the Numbers : November 3, 2017

SEACOR Holdings, Inc. reports financial results for the quarter ended September 30, 2017.

We analyze the earnings along side the following peers of SEACOR Holdings, Inc. – Hornbeck Offshore Services, Inc. and Kirby Corporation (HOS-US and KEX-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 158.17 million, Net Earnings of USD 6.63 million.
  • Gross margins widened from 14.04% to 19.23% compared to the same period last year, operating (EBITDA) margins now 19.21% from 13.50%.
  • Earnings growth from operating margin improvements as well as one-time items.

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

2017-09-30 2017-06-30 2017-03-31 2016-12-31 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 158.17 115.79 190.45 213.04 206.98
Revenue Growth (%YOY) -23.58 -41.23 -10.98 -15 -20.95
Earnings (mil) 6.63 -4.18 4.08 -93.75 -39.8
Earnings Growth (%YOY) 116.67 92.42 115.02 -64.86 -671.47
Net Margin (%) 4.19 -3.61 2.14 -44.01 -19.23
EPS 1 -1.91 0.24 -5.52 -2.35
Return on Equity (%) 0.97 -0.44 0.34 -7.57 -3.07
Return on Assets (%) 1.49 -0.71 0.56 -12.77 -5.35

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Market Share Versus Profits

Revenues History
Earnings History

CKH-US’s change in revenue this period compared to the same period last year of -23.58% 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 CKH-US is holding onto its market share. Also, for comparison purposes, revenues changed by 36.60% and earnings by 258.75% 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 earnings growth was influenced by year-on-year improvement in gross margins from 14.04% to 19.23% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 13.50% to 19.21% compared to the same period last year. For comparison, gross margins were 24.73% and EBITDA margins were 17.76% in the last reporting 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

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

CKH-US’s improvement in gross margin has been accompanied by an improvement in its balance sheet as well. This suggests that gross margin improvements are likely from operating decisions and not accounting gimmicks. Its working capital days are now 130.75 days compared to 267.20 days for the same period last year.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -1.54% to 6.25% and (2) one-time items. The company’s pretax margins are now -1.96% compared to -26.50% for the same period last year.

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

Access our Ratings and Scores for SEACOR Holdings, Inc.

Company Profile

SEACOR Holdings, Inc. is a holding company with interests in domestic and international transportation and logistics, alcohol manufacturing and merchandising, and risk management consultancy. It engages in the owning, operating, investing in, and marketing equipment, primarily in the field of oil and gas, shipping, and logistics industries. It operates through the following segments: Offshore Marine Services, Inland River Services, Shipping Services, Illinois Corn Processing, Witt O’Brien’s, and Other. The Offshore Marine Services operates a diverse fleet of support vessels primarily servicing offshore oil and gas exploration, development, and production facilities worldwide. The Inland River Services segment owns, operates, invests in, and markets domestic river transportation equipment used for moving agricultural and industrial commodities; and chemical and petrochemical products on the U.S. Inland River Waterways. The Shipping Services segment comprises of the the operation of a diversified fleet of U.S. flag marine transportation related assets. The Illinois Corn Processing LLC segment involves the operation of a single-site alcohol manufacturing, storage, and distribution facility located in Pekin, Illinois and is a producer of alcohol used in the food, beverage, industrial and petrochemical end-markets. The Witt O’Brien’s segment provides solutions for key areas of critical infrastructure, including, but not limited to, government, energy, transportation, healthcare, and education. The Other segment engages in other activities such as lending and leasing activities and non-controlling investments in various other businesses. The company was founded in 1989 and is headquartered in Fort Lauderdale, FL.

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