Trading On margin

(APG), (CARR) – APi Group shares slippage after second quarter results, warns of supply chain issues

  • APi Group Corp (NYSE: APG) reported an increase in second-quarter adjusted net income of 15.2% year-on-year to $ 978 million, beating the consensus of $ 939.51 million. Reported net revenues increased 10% year-on-year.
  • Adjusted Net Revenue by Segment: Security Services $ 512 million (+ 38% YoY), Specialty Services $ 415 million (+ 18.9% YoY) and Industrial Services $ 68 million (- 48.9% year-on-year).
  • Adjusted EPS fell to $ 0.31 from $ 0.34 in 2Q20, beating the consensus of $ 0.30.
  • Gross margin increased 415 basis points to 23.7% and adjusted gross margin contracted 27 basis points to 24.2%.
  • Operating income increased 74.1% year-on-year to $ 47 million and the margin increased 177 basis points to 4.8%.
  • APi Group has generated cash flow from operating activities of $ 19 million year-to-date, up from $ 232 million a year ago.
  • Adjusted EBITDA was $ 106 million, compared to $ 101 million in 2Q20, and the margin contracted 106 basis points to 10.8%, due to supply chain disruptions and the ‘inflation.
  • APi Group believes that the recent acquisition of Chubb Fire and Safety Company of Global Corp Carrier (NYSE: CARR), which will close later this year, will help realize revenue and cost synergies.
  • The company expects negative variables due to the impact of COVID-19, associated with supply chain disruptions and inflation, to continue through the rest of the year.
  • Price action: APG shares traded down 5.43% to $ 21.59 on the last check on Wednesday.


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