) reported its second quarter 2013 results, with earnings of 73
cents, missing Zacks Estimate of 75 cents by 2.37%. The results,
however, surpassed the prior year level of 67 cents by 9% and
also the prior quarter's EPS of 68 cents. The reported EPS bears
a negative impact from foreign currency translation amounting 4
Total revenue in the quarter inched up 3.5% year over year to
$662.5 million including sales in local currency, that were up by
3.9% year over year. Revenue was above the Zacks Consensus
Estimate of $636 million.
Segment wise, the company's revenue in the
segment climbed 10.6% in local currency to $329.2 million while
segment was down 1.9 % year over year in local currency to $333.3
Within the Life Sciences segment,
sales were up 9%. Continued strength in the biotech market and a
strong contribution from ForteBio, drove sales growth.
Food & Beverage
sales rose 7.6% reflecting strong sales growth in the Americas,
due to Latin America, accompanied by robust growth in Asia.
However, Europe continued to be affected by lower beer and wine
production levels. Overall systems sales grew approximately 20%,
attributable to contributions from all regions.
sales recorded the highest growth of 21.4% year over year in
local currency. Revenue in the segment was driven by strong sales
in the OEM market and blood media. In addition, Hospital Critical
Care also contributed to the top line growth.
Within the Industrial segment, process technologies and micro
electronics markets showed a poor performance. Sales in the
segment were mainly affected by weakness in the European markets.
Discouraging global semiconductor end markets and moderating or
low growth in some of the markets of Asia and America also
affected the company's performance.
Process Technologies sales were also down 5.1% and sales of
Microelectronics dipped 1.5%. However, this was partially offset
by Pall's Aerospace business which derived significant benefits
from the emerging markets and last quarter's backlogs. Aerospace
showed a 16.5% growth in sales year over year.
Gross margin in the quarter was 51.6% of sales, compared with
52.8% of sales in the second quarter of fiscal 2012. The decline
was attributable to unfavorable foreign currency translations.
Life Sciences operating margin was 25.1% of sales compared
with 26.1% of sales in the prior-year quarter, while Industrial
segment operating margin was 14.4% of sales versus 14.1% of sales
in the second quarter of 2012.
Balance Sheet and Cash Flow
Cash and cash equivalents were $870.2 million with long-term
debt of $474.5 million and shareowner's equity of $1.7
Net cash flow from operations for six months ended January 31,
2013 was $89.4 million compared with $204 million in the six
months of the prior-year. The decline in cash flow was primarily
attributable to the divestiture of the Blood product line
business to Haemonetics.
The weak macroeconomic condition, especially in Europe and
some of the markets in America is a matter of concern. Further,
the company also expects slow or moderate overall growth for the
Based on this concern, the company has taken some cost
reduction initiatives with a focus on the Industrial segment to
improve the segment's performance. Earnings are now expected to
be in the range of $2.95 to $3.15 for full fiscal 2013.
Pall currently has a Zacks Rank #3 (Hold) and its immediate
competitiors such as
) also carry a Zacks Rank #3 (Hold).
DANAHER CORP (DHR): Free Stock Analysis
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PALL CORP (PLL): Free Stock Analysis Report
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