IDEX Corporation ( IEX ), an industrial
goods manufacturer, delivered earnings of 74 cents per share in the
first quarter of 2013, up 12% from the year-ago quarter and ahead
of the Zacks Consensus Estimate of 71 cents. Net income stood at
$61 million, up 10% year over year. The increase in earnings was
driven by growth in operating income and margin improvement.
Net revenue in the reported quarter came in at $494.4 million
versus $489.4 million in the year-ago quarter. Although the
quarterly revenue increased year over year, it missed the Zacks
Consensus Estimate of $508 million. Orders stood at $515 million,
down 3% from the year-ago period.
By segments, the Fluid and Metering Technologies (FMT) segment
reported sales of $212 million, down 1.0% year over year. The
Health and Science Technologies (HST) segment revenues came in at
$173.0 million, inching down 1% year over year, while the Fire and
Safety segment recorded sales of $112.0 million, up 7.0% year over
On a regional basis, North America improved in the reported
quarter, while softness in the European market continued with an
uneven growth in Asia.
Operating margin in the quarter was 19.2%, up 90 basis points
year over year, driven by productivity and cost-cutting
initiatives. Earnings Before Interest, Taxes Depreciation and
Amortization (EBITDA) stood at $116 million, up 11% from the year
The FMT segment reported operating margin of 22.7%, up 50 basis
points year over year. The segment's margin was highly influenced
by the company's high productivity and cost-cutting strategy.
The HST segment's operating margin came in at 18.7%, up 40 basis
points from the year-ago quarter due to increased production and
The Fire and Safety segment recorded an operating margin of
25.3%, up 200 basis points from the year-ago quarter. The
year-over-year rise was primarily led by the company's augmented
productivity and higher volume.
Balance Sheet and Cash Flow
As of Mar 31, 2013, the company had cash and cash equivalents of
$341.0 million, compared to $318.9 million as of Dec 31, 2012.
Long-term debt increased to $815.6 million from $779.2 million at
Cash flow from operating activities amounted to $72.2 million in
the first quarter of 2013 compared to $58.7 million in the year-ago
quarter. Free cash flow stood at $67.0 million in the reported
quarter versus $52.3 million in the year-ago period. IDEX
Corporation repurchased 673,000 shares for $34 million in the
reported quarter. The company also approved a 15% increase in its
cash dividend to a quarterly dividend payout of 23 cents.
During the reported quarter IDEX Corporation completed the
acquisition of FTL Seals Technology (FTL), a manufacturer of
specialty seals and bearings. The acquisition price of 24.0 million
euros (approximately $31.0 million) was paid in cash. Post
acquisition, FTL will operate with Precision Polymer Engineering
within the Health & Science Technologies segment.
For the second quarter of 2013, earnings are expected in the
range of 73 to 75 cents per share. For full year 2013, the company
maintains its earnings guidance in the range of $2.85 to $2.95.
IDEX Corporation continues to fund organic growth while pursuing
strategic acquisitions, increase dividends and remaining active on
share repurchases. Going forward, the company expects low- to
mid-single digit organic revenue growth in 2013
IDEX Corporation currently has a Zacks Rank #3 (Hold). Other
stocks that look promising and are worth considering include T
he Babcock & Wilcox Company ( BWC ) with a Zacks Rank
#1 (Strong Buy), Graco Inc ( GGG ) and
Ingersoll-Rand, Plc ( IR ), each carrying a
Zacks Rank #2 (Buy).BABCOCK&WILCOX (BWC): Free Stock Analysis
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