Roper Industries Inc.
) reported second-quarter 2013 non-GAAP earnings of $1.31 per
share, up 13.9% from the year-ago quarter and beat the Zacks
Consensus Estimate by a penny.
Roper's non-GAAP total revenue (excluding a fair value
adjustment to acquired deferred revenues and adjustments related
to the MHA acquisition) increased 11.0% year over year to $804.9
million in the quarter. Revenues missed the Zacks Consensus
Estimate of $812.0 million.
On a GAAP basis, Roper reported revenues of $784.0 million, up
8.2% from the year-ago quarter. Acquisitions and divestitures
accounted for 11.0% of the revenue growth in the quarter. Organic
revenues increased 1.0% and the company reported a backlog of
Growth across most of its business segments also contributed
to the year-over-year increase in revenues. Revenues from Medical
& Scientific Imaging and RF Technology increased 37.8% and
3.7%, respectively. The strength in these segments more than
offset the 3.1% decline in revenues from Industrial Technology.
Energy Systems & Controls segment reported a modest 0.4%
growth on a year-over-year basis.
Adjusted gross profit increased 17.3% year over year to $466.5
million. Gross margin in the reported quarter increased to 58.0%
from 54.9% in the year-ago quarter, primarily driven by better
mix and higher revenues.
Adjusted income from operations increased 17.3% year over year
to $209.8 million. The upside in operating income was based on
improved sales. Operating margin improved from 24.7% to 26.1% on
a year-over-year basis. Adjusted net earnings increased 14.0%
from the year-ago quarter to $130.9 million.
Roper exited the quarter with $374.6 million in cash and cash
equivalents and total debt of $2.76 billion (including the
current portion) compared with $430.0 million in cash and cash
equivalents and total debt of $1.92 billion (including the
current portion) in the previous quarter. Roper reported free
cash flow of $129.1 million at the end of the second quarter.
Roper revised its fiscal 2013 earnings outlook from
$5.76-$5.94 per share to $5.72-$5.86 per share. The company also
projected that its sales will increase in the range of 12%-14%,
including organic growth of 6% to 8%, for the rest of 2013. Roper
expects operating cash flow to exceed $800 million in fiscal
We believe that strong backlog coupled with robust organic
growth will drive earnings growth. Moreover, accretive
acquisitions will expand its product portfolio, providing a
significant competitive edge over its peers.
However, macroeconomic concerns, integration issues due to
acquisitions and competition from
) are possible headwinds for the company.
Currently, Roper has a Zacks Rank #3 (Hold).
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