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Jul 01, 2023
Gates Industrial Q2 2023 Earnings Report
Gates Industrial's financial performance increased in the second quarter of 2023, marked by record net sales and core revenue growth.
Key Takeaways
Gates Industrial reported a strong second quarter in 2023, with record net sales of $936.3 million, up 3.3% year-over-year, and core revenue growth of 3.9%. Net income attributable to shareholders was $64.9 million, or $0.23 per diluted share, while adjusted net income per diluted share reached $0.36. The company is raising its full-year EPS guidance.
Net sales reached a record $936.3 million, a 3.3% increase from the prior year, driven by a 3.9% core revenue growth.
Net income attributable to shareholders increased to $64.9 million, or $0.23 per diluted share.
Adjusted net income per diluted share was reported at $0.36, up from $0.32 in the prior year.
The company is raising its 2023 full-year EPS guidance, reflecting confidence in future performance.
Revenue by Segment
Forward Guidance
The company is updating its full year financial guidance for 2023. Core Revenue Growth is expected to be between 0 to 2%. Adjusted EBITDA is expected to be between $710 to $740 Million. Adjusted EPS is expected to be between $1.18 to $1.24. Capital Expenditures are expected to be less than $100 Million and Free Cash Flow Conversion is expected to be 100%.
Positive Outlook
- Adjusted EPS guidance increased by $0.03 at the midpoint.
- Capital expenditures are expected to be slightly lower than previously anticipated.
- Free cash flow conversion remains at 100%.
- Adjusted EBITDA guidance midpoint remains unchanged.
- Maintaining strong focus on cash flow generation.
Challenges Ahead
- Core Revenue Growth guidance reduced by 2% at the midpoint.
- Slower demand trends expected in the second half of the year.
- Unspecified risks associated with international operations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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