Loading...
•
Jun 30, 2020
Alamo Group Q2 2020 Earnings Report
Alamo Group's Q2 2020 results were announced, revealing a decrease in net sales and net income compared to the same quarter last year, but the results were in line with expectations given the challenging environment.
Key Takeaways
Alamo Group reported a decrease in net sales by 5.8% to $268.6 million and a decrease in net income by 37.2% to $13.0 million for the second quarter of 2020, impacted by the COVID-19 pandemic.
Net sales for the second quarter were $268.6 million, a decrease of 5.8%.
Industrial Division net sales were $182.3 million, a decrease of 6.2%.
Agricultural Division net sales were $86.4 million, a decrease of 5.0%.
Net income for the second quarter was $13.0 million, a decrease of 37.2%.
Alamo Group
Alamo Group
Alamo Group Revenue by Segment
Revenue by Segment
Industrial Equipment Division Revenue
CapyFin.com Forward Guidance
The company anticipates that the challenging business climate will impact their business for the balance of 2020 and into next year, with budget constraints and lower incomes impacting new order placements.
Positive Outlook
- Both Industrial and Agricultural customers are using the company's equipment on a regular basis.
- The Agricultural Division products are holding up at a little better pace.
- The company's cash flow should remain strong.
- The company paid down over $50 million in debt during the quarter.
- The company is continuing to benefit from its backlog, which is still at a healthy level.
Challenges Ahead
- The challenging business climate will impact the business for the balance of 2020 and into next year as well.
- Budget constraints and lower incomes are impacting new order placements.
- Bookings are still active and coming in at a consistent pace, but at levels that are below the typical pace.
- The Industrial Division equipment is seeing more challenging conditions as reduced levels of tax revenue has had a heavier impact on governmental operating budgets.
- New bookings are the key to the company's ongoing results and while they are continuing at a steady pace, the company would like to see them at a higher level than they are currently experiencing.