) reported first quarter fiscal 2014 pro forma earnings of 70
cents a share, 1.4% above the Zacks Consensus Estimate of 69
cents. Earnings for the quarter also beat the prior-year
quarter's earnings of 68 cents a share by 2.9%. The reported EPS
includes a 2 cents negative impact from foreign currency
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 was flat year over year at $629.8
million, primarily attributable to weak industrial sales.
However, it edged past the Zacks Consensus Estimate of $628
million. However, sales in local currency managed a nominal
gain of 2% over the prior year.
The Life Sciences segment revenues climbed 7% in local
currency to $319 million in the reported quarter. This increase
was driven by a 5% rise in Biopharmaceuticals, which in turn was
aided by new products; 6% growth in the Food & Beverage
division driven by strong performance across regions; and a 17%
improvement in Medical, driven by strong sales to OEMs.
Revenues for the quarter in the Industrial segment dropped 3%
year over year in local currency to $311 million. The decline was
attributable to lower sales in one of its three sub-divisions.
Process technologies sales were down 15% in local currency due to
weakness in submarkets and Fuels & Chemicals.
However, this decline was partially offset by a 5% increase in
Aerospace due to a 9% increase in commercial aerospace.
Similarly, Micro Electronics segment sales expanded 9% in local
currency driven by strong performance across regions.
Gross margin in the quarter contracted 40 basis points to
51.7% of sales. The operating margin contracted to 30.9% in the
quarter from 31.2% in the prior-year quarter. Decline in
operating margin was attributable to higher investments in
Cash Flow and Balance Sheet
Exiting the quarter, cash and cash equivalents were $968
million compared with $936.9 million in the prior-year quarter.
Pall had a long-term debt of $467.5 million as on Oct 31, 2013,
at par with the debt level as on Jul 31, 2012. The company's debt
to capitalization ratio stood at 20.7% versus 20.5% as on Jul 31,
Net cash from operating activities for first quarter 2014 was
$85.9 million, up significantly by 120.5% from $39 million as on
Oct 31, 2012. The increase primarily reflects benefits from
income tax provisions and one time adjustments of interest in Oct
Capital expenditure for the quarter was $18.9 million, while
the company paid $27.9 million in dividends during the
The company reaffirmed its guidance for fiscal 2014. Pro forma
earnings for fiscal 2014 are expected to grow in the 9% to 15%
range, while revenues for the year are expected to grow in the
low to mid-single digit range.
Pall has a Zacks Rank #3 (Hold). Investors interested in the
pollution control industry can consider stocks including
Fuel Tech Inc.
), having a Zacks Rank #1 (Strong Buy), and
Perma-Fix Environmental Services Inc.
Sharps Compliance Corp.
), carrying a Zacks Rank #2 (Buy).
FUEL TECH INC (FTEK): Free Stock Analysis
PERMA-FIX ENVIR (PESI): Free Stock Analysis
PALL CORP (PLL): Free Stock Analysis Report
SHARPS COMPLIAN (SMED): Free Stock Analysis
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