Roper Technologies, Inc. ROP delivered positive earnings and revenue surprises of 5.3% and 1%, respectively, in third-quarter 2020.
Adjusted earnings were $3.17 per share, surpassing the Zacks Consensus Estimate of $3.01. However, the bottom line decreased 3.6% from the year-ago quarter number of $3.29 per share.
Roper’s net revenues were $1,366.1 million, up 0.9% year over year. Notably, adjusted revenues totaled $1,369 million, up 1%. The increase was primarily backed by 3% gain from acquired assets, partially offset by a decrease of 3% in organic revenues. The top line beat the Zacks Consensus Estimate of $1,352 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below.
Application Software’s revenues totaled $447.9 million, representing 32.8% of the quarter’s top line. On a year-over-year basis, the segment’s revenues grew 10.5%.
Network Software & Systems generated revenues of $430.2 million, accounting for 31.5% of third-quarter top line. Sales grew 10% year over year.
Measurement & Analytical Solutions generated revenues of $367.9 million, accounting for 26.9% of the quarter’s top line. Sales declined 7.6% year over year.
Process Technologies generated revenues of $120.1 million, accounting for 8.8% of the quarter’s top line. Sales were down 24.7% year over year.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
In the third quarter, Roper’s cost of sales increased 1.9% year over year to $490.2 million. Cost of sales was 35.9% of the quarter’s revenues compared with 35.5% a year ago. Adjusted gross profit increased 0.2% to $879 million, while adjusted gross margin was 64.2%, reflecting a contraction of 40 basis points (bps).
Selling, general and administrative expenses increased 4.1% to $508.3 million. It represented 37.2% of total revenues compared with 36.1% in the year-ago quarter. Operating profit declined 3.8% to $413.9 million, with margin of 30.3%, down 150 bps.
Balance Sheet & Cash Flow
Exiting the third quarter, Roper had cash and cash equivalents of $302.1 million compared with $709.7 million recorded on Dec 31, 2019. Long-term debt (net of current portion) was $9,101.2 million compared with $4,673.1 million at the end of 2019.
In the first nine months of 2020, the company generated net cash of $950.9 million from operating activities, down 4.5% year over year.
Capital expenditure during the third quarter totaled $8 million, lower than the year-ago figure of $14 million. Adjusted free cash flow in the quarter was up 14.2% to $442 million on a year-over-year basis.
For 2020, adjusted earnings per share are anticipated to be $12.55-$12.65 compared with $11.90-$12.40 estimated earlier.
For the fourth quarter of 2020, earnings are projected to be $3.39-$3.49 per share.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the same space are Kaman Corporation KAMN, Dover Corporation DOV and IDEX Corporation IEX. While Kaman sports a Zacks Rank #1 (Strong Buy), Dover and IDEX carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kaman delivered a positive earnings surprise of 30.42%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.
IDEX delivered a positive earnings surprise of 3.66%, on average, in the trailing four quarters.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dover Corporation (DOV): Free Stock Analysis Report
Roper Technologies, Inc. (ROP): Free Stock Analysis Report
Kaman Corporation (KAMN): Free Stock Analysis Report
IDEX Corporation (IEX): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.