Uni-Select beats expectations by swinging to US$15.5 million Q2 profit
MONTREAL - Uni-Select said Wednesday it will focus on boosting sales for the rest of the year after the automotive parts distributor swung to a US$15.5-million profit in the second quarter.
The Quebec-based company, which reports in U.S. dollars, said the profit amounted to 73 cents per share compared with a loss of $9.3 million or 43 cents per share a year ago when it was hit by a $35.2-million restructuring charge.
Excluding one-time adjustments, Uni-Select (TSX:UNS) earned $16.5 million or 77 cents per share for the period ended June 30, up from $15.6 million, or 72 cents per share a year earlier.
Revenue from Uni-Select's operations in Canada and the United States increased to $478.7 million from $476.2 million last year.
Uni-Select was expected to record 73 cents per share in adjusted profits on $464.6 million in revenues, according to analysts polled by Thomson Reuters.
"While the sales growth recorded in the second quarter was softer than expected, we are pleased with our overall performance and more particularly with our continued ability to lower costs and improve profitability, which are key drivers of our long-term growth plans," stated president and CEO Richard Roy.
He said its cost-cutting plan has made the company more competitive.
Uni-Select said the action plan remains on schedule to save $5.6 million in costs and reduce inventories by $7.6 million in the second-half of the year.
Roy said Uni-Select's main focus in the rest of the year is to accelerate sales while focusing on initiatives that will strengthen its relationship with independent wholesalers.
Organic growth during the quarter increased by 6.8 per cent in Canada and 1.3 per cent in the United States.
Benoit Poirier of Desjardins Capital Markets said the consolidated organic growth of 2.9 per cent was less than the 3.5 per cent increase he forecast.
However, he described the results as "encouraging," saying they demonstrate that its action plan is bearing fruit.
The company also announced Wednesday the creation of a chief operating officer position, but did not say who would fill the job that will report to Roy.
On the Toronto Stock Exchange, Uni-Select's shares lost 60 cents or 2.3 per cent at C$25.50 in Wednesday afternoon trading.
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