Roper Industries Inc.
) reported third quarter 2012 non-GAAP earnings per share of
$1.24 per share, up 10.7% year over year. The earnings per share
surpassed the Zacks Consensus Estimate by a penny.
Roper's non-GAAP total revenue (excluding all one time items
relating to the Sunquest acquisition and debt extinguishment
charge) increased 5.3% year over year to $750.8 million in the
quarter. However, reported revenue missed the Zacks Consensus
Estimate of $760 million.
On GAAP basis, Roper reported revenues of $747.6 million.
Acquisitions contributed 4.0% to revenue growth in the quarter,
while 3.0% came from organic growth, which offset the negative
2.0% impact of foreign currency fluctuations.
Growth across most its business segments also contributed to
the year-over-year increase in total revenues. Revenue from
Industrial Technology was up 7.4% year over year to $199 million,
primarily attributable to strong performance from the fluid
handling business. Moreover, oil shale activity remained strong,
and helped offset the weak demand in natural gas
Energy Systems & Controls revenue was up 5.2% year over
year to $158.2 million aided by growth in the compressor controls
business. Medical & Scientific Imaging revenue increased
12.2% from the previous-year quarter to $175.6 million, primarily
attributable to strong demand for Verathon Glidescope and robust
performance by Northern Digital. However, revenue from RF
Technology was down 1.2% year over year to $217.9 million, due to
lower-than-expected toll project activity.
Non-GAAP gross profit climbed up 9.7% year over year to $419.7
million. Gross margin in the reported quarter increased to 55.9%
from 53.7% in the year-ago quarter, driven by prudent revenue
mix. Moreover, gross profit margin was positively impacted by
margin expansions across its business segments.
Non-GAAP income from operations increased 15.2% year over year
to $192.7 million. The upside in operating income was based on
improved sales. Operating margin improved from 23.5% to 25.7% on
a year-over-year basis. Net earnings on non-GAAP basis increased
12% from the previous-year quarter to $123.5 million.
Roper exited the quarter with $355.1 million of cash and cash
equivalents and $2.10 billion of total debt (including the
current portion) compared with $518.7 million of cash and cash
equivalents and $1.07 billion of total debt (including the
current portion) in the previous quarter. Operating cash flow was
$205.0 million in the quarter versus $119.0 million in the
previous quarter. Free cash flow for the quarter was $197
For the fourth quarter, Roper expects non-GAAP earnings per
share in the range of $1.43-$1.49. The Zacks Consensus Estimate
is pegged at $1.46 per share.
For fiscal 2012, Roper expects non-GAAP earnings per share to
be in between $4.91 and $4.95 per share. Currently, the Zacks
Consensus Estimate for fiscal 2012 is pegged at $4.94. Moreover,
management expects operating cash flow for fiscal 2012 to be
approximately $700 million.
We believe that a strong backlog and improvement across
segments coupled with strong organic growth are likely to drive
revenues going forward. Moreover, the acquisitions are expected
to benefit the company in the long run. However, competition from
Agilent Technologies Inc.
) are the near-term headwinds.
We maintain a Neutral recommendation for Roper over the long
term (6-12 months). Currently, Roper has a Zacks #3 Rank, which
implies a short-term Hold rating on the stock.
AGILENT TECH (A): Free Stock Analysis Report
HALLIBURTON CO (HAL): Free Stock Analysis
ROPER INDS INC (ROP): Free Stock Analysis
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