IDEX Corporation ( IEX )
has posted adjusted diluted earnings per share (excluding the
effect of the restructuring charge) of 67 cents in the second
quarter of 2012 compared to 62 cents in the second quarter of 2011
and 66 cents in the earlier quarter.
The earnings in the reported quarter missed the Zacks Consensus
Estimate of 71 cents per share and the company's previously
provided guidance range of 70 to 72 cents per share for the
quarter.
The lower-than expected results were primarily due to a weak
macro-economic condition in Europe. The foreign currency
translation and acquisition charges also adversely affected the
performance of the second quarter.
Revenues
Net revenues came to $494.1 million, up 8.9% year over year and
approximately 1% sequentially. This was below the Zacks Consensus
Estimate of $503 million. Orders were up 4% annually to reach $466
million in the second quarter of 2012. The moderated orders were
due to the uncertain economic situation prevailing in Europe and
China.
The Fluid and Metering Technologies (FMT) segment reported sales
of $210.7 million, up 0.8% year over year but down 0.9%
sequentially. The Health and Science Technologies (HST) segment
revenues came in at $170.6 million, surging 21.4% annually but
declining 1.8% sequentially. The Fire and Safety segment recorded
sales of $115.9 million, rising 10.2% annually and 11.4%
sequentially.
Margins
Operating margin (excluding re-structuring charges) in the
quarter came to 18.5% versus 18.2% in the previous year quarter and
18.3% in the last quarter. This was achieved on the back of
augmented volume and high productivity. The company's better
operational efficiency also caused the margin to improve in the
reported quarter.
The FMT segment reported operating margin of 22.1%, rising from
19.9% in the last year quarter but down from 22.2% sequentially.
The segment's margin was highly influenced by the company's
enhanced production.
The HST segment's operating margin came in at 16.6%, falling
from 21.3% in the previous year quarter and 18.3% in the second
quarter of 2012. The decline was primarily attributed to the
adverse dilutive effects of acquisition activities.
The Fire and Safety products segment recorded an operating
margin of 23.4% versus 25.5% in the year-ago quarter and 23.3% in
the last quarter. The annual fall was primarily due to the $2.8
million gain on the sale of its unit in 2011.
Balance Sheet and Cash Flow
As of June 30, 2012, the company had cash and cash equivalents
of $221.1 million, decreasing from $245.5 million at the end of the
previous quarter. In addition, net receivables came in at $265.2
million, down from $270.8 million at the end of the previous
quarter. Long-term debt came down to $753.7 million from $769.9
million at the end of the previous quarter.
Cash provided by operating activities amounted to $80.7 million
in the second quarter of 2012 compared to $51.7 million in the
previous year quarter. Capital expenditures incurred were $10.2
million versus $7.2 million in the second quarter of 2011.
Share Repurchase
IDEX Corporation has repurchased 626 thousand shares worth $25.9
million during the reported quarter. In the first-half of 2012 the
company paid $118 million via share repurchases, cash dividends and
debt repayment.
Acquisition
During the second quarter the company acquired gas liquid
separation solutions and detection solutions manufacturer ERC from
MH Capital Partners II, L.P. ("MH Capital"). The acquisition was
completed at a cash consideration of nearly ¥1.65 billion.
Of late, IDEX Corporation also declared the acquisition of
Matcon, Ltd. Post acquisition, Matcon will be considered as a
subsidiary of the company's Health & Science Technologies
segment's Material Process Technologies portal.
Outlook
For the third quarter of 2012, the company estimates EPS in the
range of 62 to 64 cents per share.
For 2012, IDEX Corporation reduced its EPS expectations to a
range of $2.65 - $2.70 from a range of $2.74 - $2.82 based on its
moderated financial results reported in the second quarter as well
as the softness in global economic situation.
IDEX CORP (IEX): Free Stock Analysis Report
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