Hurco Companies, Inc. experienced a precarious journey in the third quarter of fiscal 2024, witnessing a staunch loss of $1.47 per share in contrast to the 4 cents earnings per share in the corresponding period last year.
Hurco’s Revenue Struggles
In Q3, Hurco recorded a revenue of $42.7 million, reflecting a significant 19.8% decline year over year.
The underwhelming performance was amplified by lackluster results across all geographic regions, which undoubtedly weighed down the overall revenue stream.
Despite the dwindling figures, the company’s stock managed to eke out a 3.1% gain in its most recent trading update.
Hurco’s Geographic Challenges
Hurco operates across three key regions – the Americas, Europe, and Asia Pacific.
Sales in the Americas for the third quarter were $15.4 million, dropping by 15.8% year over year. This downtrend was mainly driven by reduced shipments of Hurco and Takumi machines, particularly the 3-axis vertical machines.
European sales plummeted to $24.1 million, showing a 22.8% decline year over year due to decreased volume of shipments in countries like Germany, Italy, and the UK.
In the Asia Pacific region, sales slipped to $3.2 million, down by 15.2% from the previous year, primarily due to fewer machine shipments in China and Southeast Asia.
Hurco’s Resilient Order Book
Despite the challenging quarter, Hurco managed to secure orders worth $52.8 million, with a notable 25.5% year-over-year increase.
Noteworthy order growth was witnessed across all regions, which was encouraging for the company’s overall performance.
Hurco’s Margin Squeeze
The quarter saw Hurco’s gross profit plummet by 41.7% year over year to $7.8 million, causing the gross margin to contract significantly by 689 basis points to 18.4%.
Hurco’s Financial Health
Operating losses for the quarter totaled $2.5 million, a stark contrast to the $1 million operating profit from the same period last year.
The net loss for the quarter stood at $9.6 million, a significant decline from the $0.3 million net income reported in the prior-year quarter.
Hurco’s Financial Position
Hurco ended the quarter with cash and cash equivalents amounting to $36.1 million, slightly down from $37.5 million in the previous quarter.
Notably, the company remained debt-free at the close of the third quarter.
The net cash utilized for operating activities at the end of Q3 was $1.3 million, marking a substantial improvement from the $16.2 million deficit a year ago.
In Conclusion
Hurco’s recent financial performance paints a mixed picture, with revenue struggles and margin contractions casting shadows on the company’s path. However, the surge in order bookings suggests a glimmer of hope for a potential rebound in the coming quarters.
