Hurco Stock Falls After Q4 Loss and Declining Revenue and Margins

Indianapolis: Hurco Companies, Inc. has seen its stock drop by 3.9% after announcing its earnings for the quarter ending October 31, 2024. This is a bigger hit compared to the S&P 500, which only fell by 1.3% during the same period. Over the last month, Hurco’s stock is down 2.8%, while the S&P 500 has dropped 3.9%.

In the fourth quarter, Hurco reported a net loss of $1.4 million, or $(0.23) per diluted share. This is a stark contrast to the net income of $2.4 million, or $0.36 per diluted share, from the same quarter last year. For the entire fiscal year, the company faced a net loss of $16.6 million, or $(2.56) per diluted share, compared to a profit of $4.4 million, or $0.66 per diluted share, in fiscal 2023.

Revenue for the fourth quarter fell by 18.8% year-over-year to $53.7 million, and for the full year, it dropped 18.1% to $186.6 million. Sales were weak across all regions, with the Americas and Europe seeing declines of 21.5% and 17.5%, respectively. Asia Pacific was slightly better, with a 10.9% drop.

For the full year, revenue in the Americas and Europe decreased by 18.1% and 21.2%, while Asia Pacific saw a small increase of 2.1%. Gross profit margins also took a hit, dropping to 23% in Q4 from 26% a year ago, and annual margins fell to 20% from 25%. This was mainly due to lower sales volumes and reduced prices for certain machines.

On the bright side, selling, general, and administrative expenses went down by 9.7% to $12.7 million in the quarter. New orders for Q4 decreased by 6% year-over-year, but orders in Asia Pacific surged by 103%, helping to offset declines in the Americas and Europe.

CEO Greg Volovic pointed out the tough year, especially with a 19% drop in the global machine tool market. However, he noted some positive signs, like growth in global orders and a stronger second half of the year. The company is focusing on innovation, showcasing new technologies at the International Manufacturing Technology Show.

While no specific guidance was given for the future, management remains optimistic about navigating the ups and downs of the machine tool industry. They believe their strong balance sheet and commitment to innovation will help them return to profitability.