DXP Enterprises (NASDAQ:DXPE) Announces Quarterly Earnings Results, Misses Expectations By $0.12 EPS

DXP Enterprises (NASDAQ:DXPE) posted its quarterly earnings results on Thursday. The industrial products company reported $1.26 earnings per share for the quarter, missing the consensus estimate of $1.38 by ($0.12), Zacks reports. DXP Enterprises had a net margin of 4.27% and a return on equity of 18.41%. The firm had revenue of $521.66 million during the quarter, compared to analysts’ expectations of $531.00 million.

Here are the key takeaways from DXP Enterprises’ conference call:

• Q1 results showed strength with sales of $521.7M (+9.5% YoY), gross margin of 32.3% (+79 bps), adjusted EBITDA of $57.8M (11.1%), adjusted EPS of $1.26, and $26.3M of free cash flow.
• Innovative Pumping Solutions led growth with sales up 37.7% to $111.7M and sturdy backlogs in energy and water that management says provide multi-quarter revenue visibility.
• Sales accelerated through the quarter after a weak January (daily sales Jan $7.2M → Feb $8.4M → Mar $9.2M; April ~ $9.0M and +15% YoY), signaling improving demand into Q2.
• SG&A rose by $16.1M to $126.1M (24.2% of sales) due to discrete items—healthcare, legal/audit and other one-time costs—which could pressure near-term margins until they normalize.
• Balance sheet activity included $844.7M of total debt, a $90.4M decline in cash to $213.4M to fund three acquisitions, higher working capital and $1.8M more interest expense, increasing leverage and near-term financing costs despite ample liquidity.

DXP Enterprises Stock Performance

DXP Enterprises stock traded up $6.16 during midday trading on Friday, hitting $156.18. 202,115 shares of the company’s stock were exchanged, compared to its average volume of 224,695. DXP Enterprises has a 12-month low of $75.58 and a 12-month high of $183.91. The company has a debt-to-equity ratio of 1.64, a quick ratio of 2.94 and a current ratio of 3.34. The stock has a market cap of $2.42 billion, a price-to-earnings ratio of 29.19 and a beta of 1.07. The firm’s 50 day simple moving average is $147.76 and its 200 day simple moving average is $127.54.

Insider Transactions at DXP Enterprises

In other news, Director Joseph R. Mannes sold 1,500 shares of DXP Enterprises stock in a transaction dated Monday, March 9th. The shares were sold at an average price of $137.95, for a total value of $206,925.00. Following the sale, the director owned 13,964 shares of the company’s stock, valued at $1,926,333.80. The trade was a 9.70% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 22.70% of the company’s stock.

Institutional Trading of DXP Enterprises

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Royal Bank of Canada boosted its holdings in DXP Enterprises by 29.4% during the first quarter. Royal Bank of Canada now owns 5,071 shares of the industrial products company’s stock worth $417,000 after buying an additional 1,153 shares in the last quarter. Millennium Management LLC boosted its holdings in DXP Enterprises by 661.5% during the first quarter. Millennium Management LLC now owns 128,956 shares of the industrial products company’s stock worth $10,608,000 after buying an additional 112,021 shares in the last quarter. Jane Street Group LLC boosted its holdings in DXP Enterprises by 433.8% during the first quarter. Jane Street Group LLC now owns 58,954 shares of the industrial products company’s stock worth $4,850,000 after buying an additional 47,909 shares in the last quarter. JPMorgan Chase & Co. boosted its holdings in DXP Enterprises by 9.5% during the second quarter. JPMorgan Chase & Co. now owns 67,018 shares of the industrial products company’s stock worth $5,874,000 after buying an additional 5,820 shares in the last quarter. Finally, Russell Investments Group Ltd. boosted its holdings in DXP Enterprises by 19.3% during the second quarter. Russell Investments Group Ltd. now owns 4,699 shares of the industrial products company’s stock worth $412,000 after buying an additional 761 shares in the last quarter. Hedge funds and other institutional investors own 74.82% of the company’s stock.

Analysts Set New Price Targets

Several brokerages have commented on DXPE. Loop Capital set a $154.00 price target on shares of DXP Enterprises in a research report on Monday, March 2nd. Zacks Research raised shares of DXP Enterprises from a “hold” rating to a “strong-buy” rating in a research report on Thursday, March 12th. Finally, Wall Street Zen raised shares of DXP Enterprises from a “hold” rating to a “buy” rating in a research report on Saturday, March 28th. One investment analyst has rated the stock with a Strong Buy rating and two have assigned a Buy rating to the stock. According to MarketBeat, DXP Enterprises has a consensus rating of “Buy” and a consensus price target of $154.00.

DXP Enterprises Company Profile

DXP Enterprises, Inc is a Houston, Texas–based industrial products and services distributor serving customers across North America. The company provides a broad portfolio of maintenance, repair and operations (MRO) supplies, including fluid power components, safety products, mechanical power transmission parts, and instrumentation. DXP’s product offering spans well-recognized private brands as well as equipment and parts from leading global manufacturers, enabling clients in energy, heavy industrial and manufacturing sectors to source critical components from a single supplier.

Through its network of service centers and specialized repair facilities, DXP delivers inventory management programs, turnkey fluid power rebuilds and custom assembly solutions.