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Roper (ROP) to Report Q2 Earnings: What's in the Cards?

Roper Technologies, Inc. ROP is scheduled to report second-quarter 2020 results on Jul 28, before market open.

The company reported better-than-expected results in each of the trailing four quarters, the average earnings surprise being 3.16%. Notably, in the last reported quarter, earnings of $3.05 per share surpassed the Zacks Consensus Estimate of $2.85 by 7%.

Year to date, the firm’s shares have gained 18.7% against the industry’s decline of 9.9%.

 

 

Key Factors

Roper is expected to have gained from solid momentum across its network software and medical products businesses in the second quarter. For instance, strength across the company’s RF Ideas, iTrade, DAT and ConstructConnect businesses is likely to have strengthened its Network Software & Systems segment’s top-line performance. Notably, the Zacks Consensus Estimate for second-quarter revenues for the Network Software & Systems segment is pegged at $428 million, indicating a 16.6% increase from the year-ago quarter’s reported number.

For the Application Software segment, strength in the company’s Deltek business is likely to have supported its revenues in the to-be-reported quarter. However, reduced booking for software products across Roper’s Aderant, PowerPlan and CBORD businesses amid the coronavirus outbreak is expected to have affected the segment’s revenues in the quarter. The consensus estimate for second-quarter revenues from the Application Software segment is pegged at $370 million, suggesting a 5.4% year-over-year decline.

Moreover, the company’s unique niche market strategy and cost-control measures are likely to have supported second-quarter revenues. Further, its continued focus on improving operational efficiency is anticipated to have been beneficial.

A surge in demand for the medical products at its Verathon business will likely be a tailwind for the Measurement & Analytical Solutions segment. However, softness in the company’s short-cycle industrial and other medical product businesses are likely to get reflected in the Measurement & Analytical Solutions segment’s top-line number. Further, weakness in upstream oil and gas businesses is anticipated to have affected Roper’s Process Technologies segment in the second quarter. Notably, the consensus estimate for Measurement & Analytical Solutions and Process Technologies segments’ revenues stands at $339 million and $107 million, respectively, implying a 16.9% and 35.2% year-over-year decrease.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

But that is not the case here as we will see below.

Earnings ESP: Roper has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at $2.67.

Roper Technologies, Inc. Price and EPS Surprise

 

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote

Zacks Rank: The company carries a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Fortune Brands Home Security, Inc. FBHS has an Earnings ESP of +7.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Donaldson Company, Inc. DCI carries a Zacks Rank #3 and has an Earnings ESP of +6.02%.

Eaton Corporation, plc ETN carries a Zacks Rank #3 and has an Earnings ESP of +1.87%.

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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.

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