) reported third-quarter fiscal 2012 earnings per share from
continuing operations of 60 cents, below the Zacks Consensus
Estimate of 79 cents but above the prior-year earnings per share of
Total revenue in the quarter inched up 1% year over year to
$715.2 million, including negative impact from foreign currency
translation of 1.6%. Sales from continuing operation was $658
million, up 2.5% in terms of local currency. Sales in the quarter
were affected by weakness in the Eurozone and ERP transition
issues. Shipments of certain consumables were delayed due to ERP
Segment wise, the company's revenue in the Life Sciences segment
climbed 4.0% in local currency to $318 million and Industrial
segment was up 1.2% in local currency to $340.0 million.
Within Life Sciences, Biopharmaceuticals sales were up 4.4%,
Food & Beverage sales increased by 7.1% while Medical sales
declined by 1.5%. Within the Industrial segment, Process
Technologies sales increased by 4.7%, Aerospace sales inched up
1.0% while sales of Microelectronics declined by 7.8%.
Gross margin in the quarter was 50.8% compared with 51.5% in the
second quarter of fiscal 2011.
Life Sciences operating margin was 23.7% compared with 25.2% and
Industrial segment operating margin was 11.6% compared with
Balance Sheet and Cash Flow
Cash and cash equivalents were $535.9 million with long-term
debt of $487.9 million and shareowner's equity of $1,663.8
Net cash flow from operations was $326.4 million compared with
$281 million in the prior-year quarter.
The weak macroeconomic condition, especially in Europe, is a
matter of concern. Based on this concern, the company expects
earnings per share to be approximately $3.10 and earnings from
continuing operations to be $2.72 in fiscal 2012. For fiscal 2013,
the company expects to see low-single-digit organic sales growth,
aided by increases in Asia and the Americas, which was more than
offset by a decline in Europe.
Pall's Aeropower business derives significant benefits from the
emerging markets, particularly in Asia. Key drivers include
increasing passenger air miles flown, a ramp-up in US military
budgets, new military and commercial aircraft, and demand for new
aircraft and mobile construction equipment. In the long run, Pall
will likely benefit from several secular trends, such as global
infrastructure growth, increasing demand for water filtration
systems and continued steady growth in the medical and
However, changes in product mix and product pricing may impact
the company's operating results, particularly with the expansion of
the systems business. The company experiences significantly longer
sales cycles in systems business with less predictable revenue and
no certainty of future revenue streams from related consumable
product offerings and services.
Based in New York, Pall Corporation was incorporated in July
1946. Along with its subsidiaries, Pall Corporation is a leading
supplier of filtration, separation and purification technologies,
and uses its engineering capability and fluid management
We currently maintain our Neutral rating on Pall Corporation for
the long term, with a Zacks #3 Rank (short-term Hold
recommendation) over the next one-to-three months.
PALL CORP (PLL): Free Stock Analysis Report
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