CIRCOR Stock Gains On Q2 Earnings Beat, Reiterates FY21 Outlook

CIRCOR International, Inc. CIR reported second-quarter revenue growth of 2% year-over-year to $190 million and down 2% on an organic basis, beating the consensus of $189.2 million.

• Aerospace & Defense revenue $60.8 million (-2% Y/Y), orders $54.2 million (-29% Y/Y) and Industrial revenue $129.6 million (+5% Y/Y), orders $156 million (+34% Y/Y).
• Adjusted EPS improved to $0.35 from $0.22 in 2Q20, beating the consensus of $0.33.
• The gross margin contracted by 23 bps to 31.5%.
• The operating loss increased to $4.94 million, compared to $1.38 million a year ago.
• Segment operating revenues declined 30.3% Y/Y to $11.07 million, and margin contracted by 277 bps to 5.8%.
• CIRCOR cash used in operating activities year-to-date was $6.72 million, compared to $48.83 million a year ago. 
• CIRCOR generated cash from operations of $10.9 million and Free cash flow of $8.3 million for the quarter.
• At the end of the quarter, the company's backlog was $436.5 million (+1% Y/Y).
• The company's total debt was reduced by $14 million versus the prior quarter, driven by 2Q'21 free cash flow performance.
• Q3 Outlook: CIRCOR expects reported revenue to increase 10 to 12% and organic revenue to increase 8 to 10%, and adjusted EPS of $0.55 to $0.60 (+53% to 67% versus prior year) vs. consensus of $0.63 and free cash flow conversion of 120 to 140% ($13 to $17 million).
• FY21 outlook: The company reiterated its guidance of organic revenue growth of 2 to 4%, Adjusted EPS of $2.10 to $2.30 vs. consensus of $2.16, and adjusted net income to free cash flow conversion of 85% to 95%.
• Price Action: CIR shares closed higher by 6.97% at $31.94 on Tuesday.