) reported fourth quarter fiscal 2013 pro forma earnings of 90
cents a share, 2.3% above the Zacks Consensus Estimate of 88
cents. Earnings for the quarter also surpassed the prior-year
quarter's earnings of 86 cents a share by 4.7%. The reported EPS
included a 3 cents negative impact from foreign currency
For fiscal 2013, Pall reported earnings of $3.04 a share, a
penny above the Zacks Consensus Estimate. Fiscal 2013 earnings
were also up 8.6% from fiscal 2012.
Despite economic headwinds in some of Pall's industrial end
markets, the company reported profits attributable primarily to
improved operational execution and favorable impact from the
structural cost actions.
Total revenue in the quarter declined marginally by 0.8% year
over year to $716.8 million, but edged past the Zacks Consensus
Estimate of $715 million. Decline in the top line was primarily
attributable to weak industrial sales during the quarter.
However, sales in local currency managed a nominal gain from
segment revenues climbed 6% in local currency to $354 million in
the reported quarter. This increase was driven by a 6% rise in
Biopharmaceuticals and a 5% improvement in Medical, driven by
strong growth in the Biotech sector and strong sales in Hospital
Critical care and blood Media, respectively. This was partially
offset by lower sales in the Food & Beverage division -
attributable to weakness in China and Europe.
Revenues for the quarter in the
segment dropped 5% year over year in local currency to $363
million. The decline was attributable to lower sales in two of
its three sub-divisions. Process technologies sales were up 1% in
local currency driven by strength in Fuels & Chemicals.
During the quarter, Aerospace was the weak performer and it
reported a 10% decline in local currency year over year. The
decline was because of weakness in military aerospace, which in
turn was attributable to non-repetition of helicopter orders.
Aerospace segment of Pall in the fourth quarter of 2012
benefitted from the strong helicopter program. Similarly,
micro electronics segment sales declined 7% in local currency.
The decline was primarily due to the continuing weakness in
display and data storage end-markets.
Gross margin in the quarter remained flat year on year at
51.5% of sales. The operating margin contracted to 18.8% in the
quarter from 19.3% in the prior-year quarter. Decline in
operating margin was attributable to higher investments in
Cash Flow and Balance Sheet
Exiting the year, cash and cash equivalents were $936.9
million compared with $500.3 million in the prior-year quarter.
Pall had a long-term debt of $467.3 million as on Jul 31, 2013
compared with $490.7 million as on Jul 31, 2012. Further, the
company's debt to capitalization ratio declined from 24.5% in
2012 to 20.5% in fiscal 2013, which also indicates good debt
Operating cash flow for fiscal 2013 was $384 million, down
19.2% from $475 million as on Jul 31, 2012. The reduction
primarily reflects income tax payments associated with the
settlement of several years of U.S. tax audits and gain from the
sale of the company's Blood business.
Capital expenditure for the year was $110 million, which was
down 30.7% compared to fiscal 2012. Also, Pall repaid $358
million to its shareholders during fiscal 2013, which was divided
as $108 million for dividend payments and $250 million of share
The company also provided its guidance for fiscal 2014. Pro
forma earnings for fiscal 2014 are expected in the range of $3.30
to $3.50, while revenues for the year are expected to grow in the
low to mid-single digit range.
Pall has a Zacks Rank #4 (Sell), which might not be a good
option at the moment. However, other stocks in the industry worth
considering at the moment are
Progressive Waste Solutions Ltd
Sharps Compliance Corp.
Pure Cycle Corporation
(PCYO). Progressive Waste Solutions carries a Zacks Rank #1
(Strong Buy) while Pure Cycle Corporation and Sharps Compliance
carry a Zacks Rank #2 (Buy).
PROGRESSV WASTE (BIN): Free Stock Analysis
PURE CYCLE CORP (PCYO): Free Stock Analysis
PALL CORP (PLL): Free Stock Analysis Report
SHARPS COMPLIAN (SMED): Free Stock Analysis
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