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Mettler-Toledo Tops Q4 Earnings, Stock Down on Dismal View

Shares of Mettler-Toledo International Inc. MTD declined nearly 5% over two trading sessions following the release of fourth-quarter 2015 results on Feb 4. The decline in share price was apparently due to the unimpressive full-year 2016 guidance.

The supplier of precision instruments and services reported adjusted earnings of $4.65 in the fourth quarter, which beat the Zacks Consensus Estimate by 4 cents and improved 9.7% from the year-ago quarter.

The year-over-year growth was primarily driven by margin expansion, which fully offset declining sales. Sales fell 3.4% year over year to $673.5 million as a strong U.S. dollar hurt sales by about 6%. On a local currency basis, sales increased 3%.

Geographically, sales on a local currency basis increased 9% in the Americas, but were flat in Europe, and declined 2% in Asia/Rest of the World.

China revenues declined 8% in the quarter, which was in line with management's expectations. Sales in Brazil fell 12%, while the same declined only 1% in Russia.

On a year-over-year basis, Laboratory sales increased 6%, while Industrial sales were flat and food retailing sales declined 8%.

Gross margin expanded 150 basis points (bps) year over year to 58%, primarily driven by lower costs of material and favorable product mix. Further, foreign currency rate volatility contributed 80 bps to the expansion.

Meanwhile, adjusted operating margin expanded 180 bps on a year-over-year basis to 27.1%.

Guidance

According to management, the forecast remains clouded primarily due to prolonged uncertainty in demand in some emerging markets.

Mettler-Toledo expects local currency sales growth in the range of 3%-4% for full-year 2016. Adjusted earnings are now estimated in the range of $14.10-$14.30, reflecting an increase of 9% to 11%.

Sales growth for the first quarter of 2016 is projected at around 4%. Adjusted earnings are forecasted in the range of $2.40-$2.45, reflecting an increase of 7%-9%.

Zacks Rank & Key picks

Currently, Mettler-Toledo carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the medical sector include Bruker BRKR , Abiomed ABMD and Exactech EXAC . All the three stocks sport a Zacks Rank #1 (Strong Buy).

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BRUKER CORP (BRKR): Free Stock Analysis Report

METTLER-TOLEDO (MTD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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