ParkOhio Raises Outlook as Quarterly Revenue Hits Record
Gross margin widened to 17.9%, its highest quarterly level since 2013.
Park-Ohio Holdings Corp. (PKOH), the industrial supply-chain and manufacturing company, reported record quarterly revenue of $440.1 million, up 10% from a year earlier.
The result extended a recovery that began after revenue declined in late 2023. Sales rose 6.6% sequentially in the first quarter and another 4.5% in the second, while year-over-year growth accelerated from 4% to 10%.
GAAP earnings increased 30% to $0.87 a share, and adjusted earnings rose 24% to $0.93 a share after holding at $0.65 in each of the previous three quarters. Gross margin expanded 90 basis points from a year earlier and 60 basis points sequentially, helping operating income rise 22% to $24.5 million.
Supply Technologies led the sales growth, with revenue rising 12% to a record $209.3 million, though its operating margin eased sequentially to 8.8%. Assembly Components revenue increased 7% on new business and higher automotive-platform volumes, while segment operating income declined to $5.3 million from $5.6 million.
Engineered Products revenue climbed 10% to a record $129.4 million, and its operating margin widened 190 basis points to 7.0% as aftermarket sales and service revenue grew 13%. Bookings increased sequentially to $66 million, while backlog reached $252 million, up 29% from a year earlier.
ParkOhio now expects 2024 sales of $1.700 billion to $1.730 billion, up from its prior forecast of $1.675 billion to $1.710 billion. It raised its adjusted-earnings outlook to $3.10 to $3.30 a share from $2.90 to $3.20 and lifted the bottom of its EBITDA-margin range to 8.5%, while leaving its free-cash-flow forecast at $20 million to $30 million.
Operating cash flow improved by about $23 million, swinging to a $9.2 million inflow from a $13.7 million outflow a year earlier.
The outlook includes approximately $15 million of revenue from Southwest Steel Processing and a loss of about $0.50 a diluted share. The operation reduced second-quarter earnings by about $0.09 a share and first-half earnings by $0.21 a share, leaving its losses as a continuing restraint on ParkOhio's raised forecast.