Gloomy report doesn't cloud Sun Hydraulics

SARASOTA — Valve manufacturer Sun Hydraulics received a rare downgrade on its stock from a Wall Street firm.

Zacks Investment Research downgraded Sun's shares in a recent report to a “strong sell.” The downgrade came with a headline that stated, in part, “Sun Hydraulics faces bleak prospects.”

Zacks says the downgrade stems for an underperforming earnings report for the Sarasota-based company. “Sun Hydraulics Corp. reported lackluster results for first-quarter, leading to a 1.5% fall in its share price since then,” the Zacks report states. “Also, resentment over results was expressed through downward revisions in earnings estimates for the stock.”

The report, published Monday didn't dent Sun's share price. While it did fall in early May after the earnings report, Sun shares, traded on the Nasdaq under the symbol SNHY, closed Tuesday at $38.39, up 1.37% and within $5 of its 52-week high.

Sun earned 39 cents per share in the first quarter, below the Zacks Consensus Estimate of 41 cents, and a 9% drop from the year-ago tally of 43 cents per share. Net sales fell 4.3% year-over-year due to a 9% drop in both European and Asian sales, Zacks adds, which was partially offset by 1% gain in North America. Sun Hydraulics anticipates difficult operating conditions to persist in the second-quarter, Zacks says. Revenues are predicted at $54 million, down 12% year-over-year and 2% sequentially.

Sun designs and makes high performance screw-in hydraulic cartridge valves and manifolds for industrial markets worldwide. The company had $227.67 million in sales in 2014. The firm has received multiple positive reports from Wall Street firms in the last five years.