Shares of Hurco Companies, Inc. HURC have lost 3.9% since the company reported its earnings for the quarter ended Oct. 31, 2024. This compares to the S&P 500 Index’s 1.3% decline over the same time frame. Over the past month, the stock lost 2.8% compared with the S&P 500’s 3.9% decline.
Performance Overview
Hurco reported a net loss of $1.4 million, or $(0.23) per diluted share, for the fourth quarter of fiscal 2024 against net income of $2.4 million, or $0.36 per diluted share, in the year-ago period. For the full fiscal year, the company recorded a net loss of $16.6 million, or $(2.56) per diluted share against net income of $4.4 million, or $0.66 per diluted share, in fiscal 2023.
Revenues for the fiscal fourth quarter declined 18.8% year over year to $53.7 million, while full-year revenues fell 18.1% to $186.6 million. Weakness was observed across all geographic segments. For the fourth quarter of fiscal 2024, sales in the Americas and Europe dropped 21.5% and 17.5%, respectively, in the quarter, while Asia Pacific saw a 10.9% decline. Revenues from the Americas, Europe and Asia Pacific were $23.3 million, $25.4 million and $4.9 million, respectively, in the fiscal fourth quarter.
For the full fiscal year, revenue in the Americas and Europe decreased 18.1% and 21.2%, respectively, while Asia Pacific saw a 2.1% increase. Revenues from the Americas, Europe and Asia Pacific were $$72.3 million, $94.9 million and $19.3 million, respectively.
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Other Key Metrics
Gross profit margins contracted to 23% in the fiscal fourth quarter from 26% a year ago, with annual gross margins also declining to 20% in fiscal 2024 from 25% in fiscal 2023. The decline was due to lower volumes of vertical milling machine sales in the Americas and Europe, alongside reduced selling prices for specific machines aimed at clearing inventories and penetrating key markets.
Selling, general, and administrative (SG&A) expenses declined 9.7% to $12.7 million in the quarter, or 24% of sales, from $14 million, or 21% of sales, in the prior-year period. Full-year SG&A expenses declined 7.1% to $46 million, but the ratio to sales increased to 25% from 22%, reflecting lower revenue volumes.
New orders for the fiscal fourth quarter decreased 6% year over year to $51.1 million, although Asia Pacific orders surged 103% during the period, offsetting declines of 11% in the Americas and 13% in Europe. For the full fiscal year, new orders decreased 5% to $198.3 million, with a 54% increase in Asia Pacific partially offsetting declines of 5% and 13% in the Americas and Europe, respectively.
Hurco Companies, Inc. Price, Consensus and EPS Surprise
Hurco Companies, Inc. price-consensus-eps-surprise-chart | Hurco Companies, Inc. Quote
Management Commentary
CEO Greg Volovic highlighted the challenges faced during the year, particularly the 19% contraction in the global machine tool market. Despite the downturn, Volovic pointed to signs of improvement, including growth in global orders and a stronger second half. The company showcased its technological advancements at the International Manufacturing Technology Show, including autonomous machining capabilities and new control systems, signaling its focus on innovation to maintain competitive positioning.
Factors Influencing Results
Hurco’s performance was affected by weak demand across most regions, exacerbated by a challenging pricing environment and decreased shipments of key products like Hurco and Takumi machines. Positive contributions came from increased sales of Hurco’s higher-performance 5-axis machines and ProCobots automation solutions. Unfavorable currency impacts further pressured results in certain regions.
Guidance
While no specific forward guidance was provided, management expressed optimism about navigating through the cyclical nature of the machine tool industry. Volovic emphasized the company’s strong balance sheet, technological investments, and commitment to returning to profitability as key factors supporting its long-term outlook.
Other Developments
There were no significant acquisitions, divestitures, or restructuring activities reported during the quarter.
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