) reported fourth-quarter fiscal 2012 earnings per share from
continuing operations of 99 cents, up 28.6% from the Zacks
Consensus Estimate of 77 cents. Reported earnings were also ahead
of the prior-year level of 76 cents a share.
Total revenue in the quarter inched up 0.4% year over year to
$783.7 million, including a negative impact from foreign currency
translation of 5 cents. Sales from continuing operation were $722.4
million, up 6.4% in local currency. Sales in the quarter were
affected by weakness in Euro zone and ERP transition issues, which
affected shipment of consumables.
Segment wise, the company's revenue in the Life Sciences segment
climbed 7.8% in local currency to $334 million while Industrial
segment was up 5.2% in local currency to $387.7 million.
Within Life Sciences, Biopharmaceuticals sales were up 16.1%,
Food & Beverage sales declined 9.1% while Medical sales grew
1.9% year over year in local currency. Within the Industrial
segment, Process Technologies sales increased 3.8%, Aerospace sales
surged 20.8% while sales of Microelectronics dipped 1.5%.
Gross margin in the quarter was 51.5% compared with 49.2% in the
fourth quarter of fiscal 2011.
Life Sciences operating margin was 25.7% compared with 23.8% in
the prior-year quarter. While Industrial segment operating margin
was 17.4% versus 12.5% in the fourth quarter of 2011.
Balance Sheet and Cash Flow
Cash and cash equivalents were $500.2 million with long-term
debt of $490.7 million and shareowner's equity of $1,510.0
Net cash flow from operations was $474.8 million compared with
$430 million in the prior-year quarter.
The weak macroeconomic condition, especially in Europe, is a
matter of concern. Further, the company also expects slower global
semiconductor end markets and moderating growth in some of the
emerging markets. Based on this concern, the company reduced its
lower end of the guidance. Earnings are now expected to be in the
range of $5.05 to $5.25 for fiscal 2013.
Pall's Aeropower business derives significant benefits from the
emerging markets, particularly in Asia. Key drivers include
increasing passenger air miles flown, 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, change 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.
Pall currently has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.
PALL CORP (PLL): Free Stock Analysis Report
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