KLX, Inc. (KLXI) Tops Q4 EPS by 2c

KLX, Inc. (NASDAQ: KLXI) reported Q4 EPS of $0.49, $0.02 better than the analyst estimate of $0.47. Revenue for the quarter came in at $358.2 million versus the consensus estimate of $368.63 million.

OUTLOOK

Commenting on the Company’s outlook, Mr. Khoury stated, “For the full year 2016, we expect ASG to deliver a low single digit constant currency increase in revenues as compared to the prior year, and an operating margin in excess of 18 percent on an unadjusted basis. We are focused on executing our previously announced cost reduction program. We expect ASG’s cost reduction program to be implemented by the end of the third quarter of 2016. In addition, we are actively evaluating strategic acquisition opportunities that would complement our ASG business.”

Mr. Khoury continued, “With respect to our ESG business, we expect the current challenging industry conditions to continue. The financial crisis facing the domestic exploration and production industry is placing unprecedented pressures on all market participants. We are taking the necessary steps within our ESG business to aggressively manage our costs, without compromising the tremendous business platform we have built. This includes an approximately 50 percent reduction in capital expenditures in 2016, additional workforce rightsizing and other significant ongoing cost reduction initiatives. We believe the aforementioned cost reduction initiatives will provide substantial progress to move our ESG segment toward our goal of achieving break-even cash flow results in these very challenging times. We remain focused on serving ESG’s customers and continuing to build ESG’s reputation for first class service. We also believe ESG is well positioned to benefit as weaker competitors are forced to abandon the marketplace. Industry sources are beginning to coalesce around a point of view and expectation that at some point in 2017, there will be a rebalancing of oil supply and demand as a result of continued global demand growth and the contraction of non-OPEC production, which should ultimately begin to lift oil and gas prices and spur capital investment and eventually provide an impetus to a recovery in this industry.”

For earnings history and earnings-related data on KLX, Inc. (KLXI) click here.

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