Industrial goods manufacturer
) reported strong first quarter 2014 results with a healthy
year-over-year increase in revenues and earnings through focused
business-line strategies. Net income for the reported quarter was
$74.5 million or 91 cents per share versus $61.3 million or 74
cents per share in the year-ago quarter. The year-over-year
improvement in earnings was primarily driven by a solid increase
in revenues. The reported earnings were well ahead of the Zacks
Consensus Estimate of 84 cents.
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Net sales in the reported quarter improved to $544.0 million from
$494.4 million in the prior-year period. Quarterly revenues also
exceeded the Zacks Consensus Estimate of $526 million. Orders
stood at $536 million, up 4% year over year. Organic growth
contributed 8% and 3% to quarterly sales and orders,
Fluid and Metering Technologies
(FMT) reported sales of $223 million in the quarter, up 6% year
over year. The
Health and Science Technologies
(HST) segment revenues came in at $186 million in the reported
quarter, improving 8% year over year, while the
Fire and Safety/Diversified Products
segment recorded sales of $137 million, up 23% year over year.
Operating income for the quarter was up 20% year over year to
$114 million. Operating margin improved 170 basis points to
20.9%, driven by an increase in productivity and volume leverage.
Earnings before Interest, Taxes Depreciation and Amortization
(EBITDA) stood at $134 million in the reported quarter, up 16%
from the year-ago period.
The FMT segment recorded an operating margin of 25.3% in the
reported quarter, up 260 basis points year over year. Margins
benefited from higher volume and productivity initiatives.
The HST segment's operating margin came in at 19.4%, up 70 basis
points from the year-ago quarter driven by higher volume and
The Fire and Safety segment recorded an operating margin of
28.9%, up 360 basis points from the year-ago quarter. The
year-over-year increase was primarily attributable to volume
leverage from the fulfillment of the large Dispensing order
received in the third quarter of 2013.
Balance Sheet and Cash Flow
As of Mar 31, 2014, IDEX Corporation had cash and cash
equivalents of $458.4 million, while long-term debt stood at
Cash flow from operating activities for the quarter aggregated
$74.2 million compared with $72.2 million in the previous year.
Free cash flow stood at $66.3 million at quarter end versus $67.0
million at the end of the year-ago period.
IDEX Corporation repurchased 551,000 shares for $40 million
during the quarter. At the same time, the company announced a
21.7% year-over-year hike in its dividend payout to 28 cents or
$1.12 per share on an annualized basis. The increased cash
dividend is payable on Apr 30 to shareholders of record as of Apr
21. The dividend marks the 78th consecutive quarterly cash
dividend payment by the company. A steady dividend payout is part
of the long-term strategy of IDEX Corporation to provide
attractive risk-adjusted returns to its stockholders. In
addition, decent dividend increases at periodic intervals have
been one of the company's most attractive features.
IDEX Corporation remains bullish about its top- and bottom-line
growth. The company expects North American markets to remain
positive supported by continued stability in Europe and tempered
by uneven growth in Asia. Despite the mixed growth expectations,
second quarter 2014 earnings are expected in the range of 85 to
87 cents per share. For full year 2014, the company increased its
earnings guidance to the range of $3.38 to $3.45 from the earlier
projections of $3.33 to $3.43.
IDEX Corporation continues to drive organic growth while pursuing
strategic acquisitions, increasing dividends and remaining active
on share repurchases. Overall, we are encouraged by the company's
IDEX Corporation currently has a Zacks Rank #2 (Buy). Other
stocks that are worth a look in the industry include
), each carrying a comparable Zacks Rank #2 (Buy).