Douglas Dynamics delivered better-than-expected earnings in the fourth quarter as the manufacturer and upfitter of commercial work truck attachments and equipment saw strong retail activity and benefitted from the positive impact of early season snowfall on customer reordering.
Shares of Douglas Dynamics (PLOW) rose 4.5% on Feb. 22 after the company posted fourth-quarter earnings per share (EPS) of $0.78, which came in ahead of analysts’ expectations of $0.59.
Revenue decreased by $2.1 million year-on-year to $158.16 million topping analysts’ estimates of $147.87 million. Meanwhile, gross margin expanded to 30.2% from 28.9% in the year-ago period. The decline in 4Q revenues was attributable to supply chain constraints at the beginning of the quarter, which was partially offset by higher attachment sales.
For fiscal 2020, the company generated sales of $480.2 million, down from the $571.7 million posted in 2019 due to lower volumes. Diluted earnings per share came in at $1.18 versus $2.42 in the year-ago period.
Douglas Dynamics CEO Bob McCormick said, “We are realistic regarding both the unpredictable economic environment and potential for additional pandemic disruption, and remain optimistic about the potential for improved conditions and performance in 2021.”
Douglas Dynamics declared a $0.285 dividend for 1Q, up from the previous dividend of $0.28.
Looking ahead to fiscal 2021, Douglas Dynamics sees revenues land between $505 million to $565 million and earnings per share to be in the range of $1.20 to $2. The outlook assumes a relatively stable macro environment, COVID-19 restrictions and average snowfall levels in the company’s markets. (See Douglas Dynamics stock analysis on TipRanks)
On Feb. 19, Robert W. Baird analyst Timothy Wojs reiterated a Buy rating on the stock with a price target of $52 (4.4% upside potential). That’s after shares fell about 9.4% over the past year.
According to TipRanks’ Smart Score system, Douglas Dynamics gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.