Market Overview - ESAB Corporation's addressable market is estimated to be approximately $40 billion by the end of 2028, with 48% of 2024 revenues derived from high growth markets[18]. - The company's gas control business is well-positioned in attractive markets such as medical and specialty gas control[18]. - ESAB's international operations provide exposure to high growth economies, which are expected to offer additional growth opportunities[26]. - In the year ended December 31, 2024, 78% of the company's sales were derived from international operations, with 43% from the Americas and 57% from EMEA & APAC[54]. - The company believes its business mix is well balanced between high growth and developed markets, which helps mitigate cyclical industrial market exposures[185]. Financial Performance - Net sales for the year ended December 31, 2024, decreased to $2,740.8 million, down from $2,774.8 million in 2023, reflecting a decline of $34.0 million or 1.2%[206]. - Adjusted EBITDA for 2024 was $528.8 million, an increase from $501.1 million in 2023, resulting in an Adjusted EBITDA margin of 19.3%, up from 18.1%[212]. - Gross profit for 2024 increased to $1,037.5 million, with a gross profit margin of 37.9%, compared to $1,015.8 million and 36.6% in 2023[212]. - Core sales for 2024 were $2,591.2 million, a decrease of $29.8 million or 1.1% from $2,620.9 million in 2023[209]. - Net income from continuing operations for 2024 was $293.1 million, compared to $223.4 million in 2023, reflecting a net income margin increase to 10.7% from 8.0%[212]. Acquisitions and Growth Strategy - The company completed three acquisitions during the year ended December 31, 2024, and expects to pursue more acquisitions in the future[19]. - The company expects strategic acquisitions to contribute to growth, having recently acquired Therapy Equipment Limited in 2023 and Sager S.A., ESAB Bangladesh, and SUMIG in 2024[186]. - The company seeks acquisition opportunities to expand into new markets and enhance its position in existing markets, but faces risks related to integration and realization of anticipated benefits[67][69]. Workforce and Employment - Approximately 9,300 associates are employed by ESAB, with around 1,300 in the United States and 8,000 outside the United States[40]. - Approximately 18% of U.S. associates are covered by collective bargaining agreements, while 39% of non-U.S. associates are represented by foreign trade unions[45]. - The company is committed to a "Talent First" strategy, focusing on attracting and retaining talent while ensuring associate health and safety[41]. - Approximately 36% of the company's associates were represented by trade unions and works councils as of December 31, 2024[103]. - The company has approximately 8,000 associates in foreign locations, representing about 86% of its worldwide associate base[103]. Risks and Challenges - The company faces risks from cybersecurity incidents that could materially affect its business, financial condition, and results of operations[77]. - The company is exposed to fluctuations in currency exchange rates, with approximately 78% of sales derived from operations outside the United States[65]. - The cyclical nature of the welding and cutting industry may adversely affect the company's performance, particularly during periods of economic downturn[52]. - A significant decline in capital investment and maintenance expenditures by customers could reduce demand for the company's products and services, impacting financial performance[53]. - The occurrence of legal claims, regulatory actions, or environmental liabilities could have a material adverse effect on the company's business and financial results[126]. Debt and Capital Structure - As of December 31, 2024, the company has $1.1 billion of outstanding indebtedness and the ability to incur an additional $50 million of indebtedness through uncommitted credit lines[78]. - The company issued $700 million in aggregate principal amount of 6.25% senior notes due 2029 on April 9, 2024[81]. - The company may require additional capital to finance its growth strategy, which may not be available or may not be on acceptable terms[72]. Regulatory and Compliance - The company is subject to ongoing audits by tax authorities, which could result in unfavorable tax adjustments impacting future financial results[100]. - Changes in tax rates and regulations could adversely affect the company's financial results, particularly with the potential implementation of a global minimum corporate tax[99]. - The company is subject to various United States sanctions and export control regulations, which could result in substantial fines or other sanctions if not complied with[115][117]. - The company must comply with stringent environmental and health and safety laws, which could result in costly liabilities if not adhered to[120][121]. Dividend and Shareholder Returns - The company declared a quarterly cash dividend of $0.06 per share for Q1 2024 and $0.08 per share for Q2, Q3, and Q4 2024, but future dividends are not guaranteed[138]. - The company’s ability to pay dividends will depend on its financial condition, earnings, and capital requirements[139]. - The company authorized a stock repurchase program to buy back up to 5 million shares of common stock, with no repurchases made during the year ended December 31, 2024[178]. Operational Insights - The company operates through two reportable segments: "Americas" and "EMEA & APAC," serving a diversified global customer base[184]. - The company operates defined benefit pension plans and post-retirement medical and death benefit plans, which may be subject to funding requirements that could adversely affect its financial condition[106]. - A significant portion of the pension plans' assets are invested in publicly traded debt and equity securities, making them vulnerable to market risks[107]. - The company relies on third-party suppliers for a substantial amount of raw materials, parts, and components, which may be subject to price changes and availability issues[91].

Financial Performance - ESAB reported fourth quarter sales of $671 million, a decrease of 3% year-over-year, with flat core organic growth[3]. - Net income from continuing operations attributable to ESAB was $72 million, or $1.18 diluted earnings per share, with core adjusted net income of $79 million, or $1.28 diluted earnings per share[3]. - Core adjusted EBITDA for the fourth quarter was $129 million, representing a 2% increase and a margin expansion of 90 basis points to 20.3%[3]. - The company achieved high-single-digit growth in welding equipment during the quarter, contributing to overall performance[9]. - ESAB's operating income for the fourth quarter was $111 million, compared to $103.7 million in the prior year[24]. - The company reported a net income attributable to ESAB Corporation of $53.7 million for the fourth quarter, up from $50.2 million year-over-year[24]. - Net income from continuing operations (GAAP) for Q4 2024 was $73.6 million, up from $59.6 million in Q4 2023, representing a 23.5% increase[26]. - Adjusted net income from continuing operations (non-GAAP) for Q4 2024 was $80.1 million, compared to $70.8 million in Q4 2023, reflecting a 17.5% growth[26]. - Adjusted EBITDA for Q4 2024 reached $131.2 million, an increase from $128.5 million in Q4 2023, indicating a 2.1% rise[28]. - Adjusted EBITDA margin (non-GAAP) for Q4 2024 was 19.6%, compared to 18.6% in Q4 2023, showing an improvement of 1.0 percentage points[28]. - Core adjusted net income per share (non-GAAP) for Q4 2024 was $1.28, up from $1.13 in Q4 2023, marking a 13.3% increase[30]. - Total net income from continuing operations for the year ended December 31, 2024, was $293.1 million, compared to $223.4 million in 2023, a significant increase of 31.2%[26]. - Adjusted net income margin from continuing operations for the year 2024 was 11.8%, up from 10.3% in 2023, reflecting a 1.5 percentage point improvement[26]. - Net income for the year ended December 31, 2024, increased to $270,748, up from $211,024 in 2023, representing a growth of approximately 28%[49]. Future Projections - The company expects core organic growth of 0.0% to 2.0% and total core sales growth of (2.0)% to 0.0% in 2025, impacted by approximately (3.5)% currency headwinds[5]. - ESAB anticipates core adjusted EBITDA of $515 million to $530 million and core adjusted EPS of $5.10 to $5.25 for the full year 2025[5]. - The company expects 2025 core net sales growth to range from -2.0% to 0.0%, with organic growth projected at 0.0% to 2.0% and acquisitions contributing approximately 1.5%[42]. - The company's core adjusted EBITDA for 2024 is projected to be $510.7 million, with a range of $515 million to $530 million for 2025[42]. Acquisitions and Investments - The acquisition of SUMIG, a South American light automation and equipment business, was completed in Q4 2024 to enhance global market opportunities[6]. - ESAB signed an agreement to acquire Bavaria Schweisstechnik GmbH, a European business, expected to close in 2025, which will strengthen its consumables portfolio[7]. - The company reported a significant increase in acquisitions, net of cash received, totaling $153,664, compared to $18,665 in 2023[49]. Cash Flow and Assets - Adjusted free cash flow for the year ended December 31, 2023, was $320.5 million, compared to $304.5 million for the previous year[40]. - Cash and cash equivalents increased to $249.4 million as of December 31, 2024, compared to $102.0 million as of December 31, 2023[45]. - Total assets grew to $4,033.975 million as of December 31, 2024, up from $3,828.629 million as of December 31, 2023[45]. - The company reported a decrease in retained earnings to $597.2 million as of December 31, 2024, compared to $350.6 million as of December 31, 2023[45]. - Net cash provided by operating activities rose to $355,399, compared to $330,494 in the previous year, indicating an increase of about 7.5%[49]. - The company experienced a net cash used in investing activities of $205,696, compared to $62,243 in the prior year, indicating a significant increase in investment outflows[49]. Currency Impact and Sales - The impact of foreign currency translation resulted in a decline of $89.7 million (3.2%) in total sales for the year ended December 31, 2023[37]. - For the three months ended December 31, 2023, total sales declined by $18.6 million, or 2.7%, with Americas sales decreasing by $25.2 million (8.2%) and EMEA & APAC sales increasing by $6.6 million (1.7%)[34]. - For the year ended December 31, 2023, total sales were $2,774.8 million, reflecting a decline of $34.0 million (1.2%), with Americas sales decreasing by $38.3 million (3.1%) and EMEA & APAC sales increasing by $4.3 million (0.3%)[37]. Expenses and Charges - Restructuring and other related charges for Q4 2024 were $1.7 million, down from $6.4 million in Q4 2023, showing a reduction of 73.4%[28]. - The company reported a pension settlement loss of $12.2 million for the year ended December 31, 2024, compared to no loss reported in 2023[26]. - Depreciation, amortization, and other impairment charges were reported at $66,790, down from $75,034 in the previous year, indicating a decrease of about 11%[49]. - Stock-based compensation expense increased to $19,780 from $16,122, representing a rise of approximately 22%[49]. Dividends and Borrowings - The company paid dividends totaling $16,992, an increase from $13,342 in the previous year, reflecting a growth of approximately 27%[49]. - Proceeds from borrowings on Senior Notes amounted to $700,000, with additional borrowings on revolving credit facilities totaling $205,000[49]. - The effect of foreign exchange rates on cash and cash equivalents resulted in a decrease of $34,017, compared to a decrease of $18,555 in 2023[49].

Core Insights - Esab (ESAB) has consistently surpassed earnings estimates and is well-positioned for future earnings reports [1][2] Earnings Performance - In the last two quarters, Esab has exceeded earnings estimates by an average of 7.77% [2] - For the most recent quarter, Esab reported earnings of $1.25 per share against an expectation of $1.12, resulting in a surprise of 11.61% [3] - In the previous quarter, the consensus estimate was $1.27 per share, while the actual earnings were $1.32 per share, leading to a surprise of 3.94% [3] Earnings Estimates and Predictions - Estimates for Esab have been trending higher due to its history of earnings surprises [4] - The stock has a positive Zacks Earnings ESP of +1.75%, indicating bullish sentiment among analysts regarding the company's earnings prospects [7] - The combination of a positive Earnings ESP and a Zacks Rank 3 (Hold) suggests a high likelihood of another earnings beat [7] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [5] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [6] Importance of Earnings ESP - A negative Earnings ESP reduces predictive power but does not necessarily indicate an earnings miss [8] - Companies can still beat consensus EPS estimates despite a negative Earnings ESP, and some stocks may remain stable even if they miss estimates [8] - It is crucial to check a company's Earnings ESP before quarterly releases to enhance the chances of successful investment decisions [9]

Group 1 - ESAB has experienced significant selling pressure, resulting in an 8.2% loss over the past four weeks, but it is now in oversold territory with potential for better earnings than previously predicted [1] - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - The RSI reading for ESAB is currently at 28.06, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5] Group 2 - Analysts have raised earnings estimates for ESAB, with a 0.5% increase in the consensus EPS estimate over the last 30 days, indicating potential price appreciation [6] - ESAB holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which supports the likelihood of a near-term turnaround [7]

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Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

ESAB Corporation (NYSE:ESAB) Q3 2024 Earnings Conference Call October 29, 2024 8:00 AM ET Company Participants Mark Barbalato - Vice President of Investor Relations Shyam Kambeyanda - President & Chief Executive Officer Kevin Johnson - Chief Financial Officer Conference Call Participants Mig Dobre - Baird Adam Farley - Stifel Tami Zakaria - JPMorgan David Raso - Evercore Chris Dankert - Loop Capital Bryan Blair - Oppenheimer Operator Thank you for standing by. At this time, I would like to welcome everyone ...

Esab (ESAB) came out with quarterly earnings of $1.25 per share, beating the Zacks Consensus Estimate of $1.12 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.61%. A quarter ago, it was expected that this maker of welding and cutting equipment would post earnings of $1.27 per share when it actually produced earnings of $1.32, delivering a surprise of 3.94%.Over the last four qua ...

Financial Performance - ESAB reported third quarter sales of $673 million, a decrease of 1% on a reported basis, but an increase of 1% on a core organic growth basis compared to the prior year[2]. - Net income from continuing operations attributable to ESAB was $69 million, or $1.13 diluted earnings per share, with core adjusted net income of $77 million, or $1.25 diluted earnings per share[2]. - Core adjusted EBITDA for the third quarter was $125 million, representing a 6% increase and a margin expansion of 130 basis points to 19.6% compared to the prior year quarter[2]. - The company reported a net income attributable to ESAB Corporation of $68.2 million for the third quarter, an increase from $57.6 million in the prior year[18]. - Net income from continuing operations for Q3 2024 was $71.0 million, up from $60.8 million in Q3 2023, representing a 19.0% increase[20]. - Adjusted net income for Q3 2024 reached $78.6 million, compared to $69.0 million in Q3 2023, reflecting a 25.0% year-over-year growth[20]. - Adjusted EBITDA for Q3 2024 was $127.4 million, an increase from $122.5 million in Q3 2023, indicating a 4.0% rise[21]. - Adjusted net income margin from continuing operations improved to 11.7% in Q3 2024, compared to 10.2% in Q3 2023[20]. - Core adjusted net income from continuing operations for the nine months ended September 27, 2024, was $232.0 million, up from $203.1 million for the same period in 2023, marking a 14.2% increase[20]. - Adjusted EBITDA margin for Q3 2024 was 18.9%, slightly up from 18.0% in Q3 2023[21]. Sales and Growth Outlook - The company raised its full year 2024 total core sales growth outlook to a range of (1.5)% to (0.5)% and core organic sales growth to 0.0% to 1.0%[4]. - The 2024 core net sales growth range is projected to be between -1.5% and -0.5%[33]. - Organic sales growth in the Americas was 2.0%, while EMEA & APAC experienced a growth of 0.1%[25]. Cash Flow and Investments - ESAB's cash flow remained robust amid a challenging end market environment, enhancing confidence in achieving long-term targets by 2028[3]. - The adjusted free cash flow for the three months ended September 27, 2024, was $95.8 million, compared to $99.9 million for the same period in 2023[31]. - Net cash provided by operating activities was $228,523 thousand, compared to $208,099 thousand in the same period last year, reflecting an increase of about 9.7%[36]. - Net cash used in investing activities rose significantly to $(114,214) thousand, compared to $(42,359) thousand in the prior year, indicating a year-over-year increase of approximately 169%[36]. - Cash and cash equivalents at the end of the period reached $253,670 thousand, a substantial increase from $82,833 thousand at the end of the same period last year, marking a growth of over 206%[36]. Strategic Initiatives - The company emphasized positive volume growth and record margins driven by new product launches and strategic investments in commercial transformation[3]. - The company continues to focus on geographic expansion and bolt-on acquisitions to drive growth[3]. - The company made acquisitions net of cash received totaling $(86,537) thousand, significantly higher than $(18,665) thousand in the prior year, suggesting an aggressive expansion strategy[36]. Cost Management and Charges - Restructuring and related charges for Q3 2024 were $1.9 million, down from $3.1 million in Q3 2023, showing a reduction of 38.7%[20]. - Acquisition-amortization and other related charges for Q3 2024 totaled $10.0 million, compared to $9.3 million in Q3 2023, reflecting a 7.5% increase[20]. - The company experienced a pension settlement loss of $12.2 million for the nine months ended September 27, 2024, compared to no loss reported in the same period of 2023[20]. - The company reported a pension settlement loss of $12,155 thousand, which was not present in the previous year[36]. - Stock-based compensation expense increased to $14,473 thousand, compared to $11,150 thousand in the prior year, reflecting a rise of approximately 30.9%[36]. - Changes in trade receivables resulted in a decrease of $(39,075) thousand, compared to a decrease of $(15,170) thousand in the previous year, indicating a worsening in receivables management[36]. Balance Sheet Highlights - Total current assets increased to $1,221.5 million as of September 27, 2024, compared to $997.7 million at the end of 2023[35]. - Long-term debt rose to $1,080.2 million as of September 27, 2024, up from $1,018.1 million at the end of 2023[35]. - Retained earnings increased to $548.3 million as of September 27, 2024, compared to $350.6 million at the end of 2023[35]. - The company anticipates a currency impact of approximately -2.5% on core net sales for 2024[33].

Esab (ESAB) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 29. On ...