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Roper (ROP) Q4 Earnings, Revenues Beat Estimates, Up Y/Y
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Roper Technologies, Inc. (ROP - Free Report) reported fourth-quarter 2016 adjusted earnings per share of $1.86, which beat the Zacks Consensus Estimate of $1.82 and increased 2.2% year over year. Revenues of $1.011 billion beat the consensus mark of $1.003 billion and were up 7% year over year.
Organic revenues were up 2% while orders increased 17% year over year to $1.085 billion in the quarter.
Roper maintained that acquisitions will help boost its performance especially the software and network businesses. Roper has spent nearly $3.7 billion in software acquisitions, which include ConstructConnect and Deltek. Management expects half of its total EBITDA in 2017 to come from software and network businesses.
Segment Revenue Details
Revenues from Medical & Scientific Imaging increased 9.4% year over year to $352 million.
Revenues from RF Technology went up 19.8% from the year-ago quarter to $337.7 million.
Revenues from Industrial Technology however decreased 2% year over year to $178.4 million.
Also, revenues from Energy Systems & Controls declined nearly 9.7% year over year to $142.6 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Adjusted gross margin increased 50 basis points (bps) to 62.3%.
Balance Sheet and Cash Flow
Roper Technologies ended the quarter with approximately $757.2 million in cash and equivalents compared with $778.5 million as on Dec 31, 2015. Long-term debt was $5.809 billion compared with $3.264 billion at the end of 2015.
For the year, the company’s adjusted cash flow was $1.001 billion while adjusted free cash flow was $961 million.
Guidance
For the first quarter of 2017, Roper Technologies expects adjusted earnings per share in a range of $1.92 - $2.00.
For 2017, the company expects adjusted earnings per share in a range of $8.82 - $9.22 per share. Adjusted revenues are expected to be up in a band of 20% to 22% year over year. Organic revenues are expected to be up in a range of 3% to 5%.
Our Take
The company’s business has been affected because of the weakness in the oil and gas sector. Sluggish global macroeconomic conditions also remain concerns. Stiff competition from the likes of Applied Industrial Technologies, Inc. (AIT - Free Report) , Barnes Group Inc. (B - Free Report) and Chart Industries Inc. (GTLS - Free Report) is an added concern. We note that Roper has underperformed the Zacks categorized Machinery-Gen Industrial industry in the last one year. The company’s shares have increased 19.27% compared with the industry’s gain of 34.49% during the period.
However, we believe that Roper’s asset-light business model and robust M&A activity will likely boostits business. The acquisitions of Deltek and ConstructConnect and winning New York City’s MTA project are significant positives. The company's strong dividend policy is also an added positive.
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Roper (ROP) Q4 Earnings, Revenues Beat Estimates, Up Y/Y
Roper Technologies, Inc. (ROP - Free Report) reported fourth-quarter 2016 adjusted earnings per share of $1.86, which beat the Zacks Consensus Estimate of $1.82 and increased 2.2% year over year. Revenues of $1.011 billion beat the consensus mark of $1.003 billion and were up 7% year over year.
Organic revenues were up 2% while orders increased 17% year over year to $1.085 billion in the quarter.
Roper maintained that acquisitions will help boost its performance especially the software and network businesses. Roper has spent nearly $3.7 billion in software acquisitions, which include ConstructConnect and Deltek. Management expects half of its total EBITDA in 2017 to come from software and network businesses.
Segment Revenue Details
Revenues from Medical & Scientific Imaging increased 9.4% year over year to $352 million.
Revenues from RF Technology went up 19.8% from the year-ago quarter to $337.7 million.
Revenues from Industrial Technology however decreased 2% year over year to $178.4 million.
Also, revenues from Energy Systems & Controls declined nearly 9.7% year over year to $142.6 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. Price, Consensus and EPS Surprise | Roper Technologies, Inc. Quote
Margins
Adjusted gross margin increased 50 basis points (bps) to 62.3%.
Balance Sheet and Cash Flow
Roper Technologies ended the quarter with approximately $757.2 million in cash and equivalents compared with $778.5 million as on Dec 31, 2015. Long-term debt was $5.809 billion compared with $3.264 billion at the end of 2015.
For the year, the company’s adjusted cash flow was $1.001 billion while adjusted free cash flow was $961 million.
Guidance
For the first quarter of 2017, Roper Technologies expects adjusted earnings per share in a range of $1.92 - $2.00.
For 2017, the company expects adjusted earnings per share in a range of $8.82 - $9.22 per share. Adjusted revenues are expected to be up in a band of 20% to 22% year over year. Organic revenues are expected to be up in a range of 3% to 5%.
Our Take
The company’s business has been affected because of the weakness in the oil and gas sector. Sluggish global macroeconomic conditions also remain concerns. Stiff competition from the likes of Applied Industrial Technologies, Inc. (AIT - Free Report) , Barnes Group Inc. (B - Free Report) and Chart Industries Inc. (GTLS - Free Report) is an added concern. We note that Roper has underperformed the Zacks categorized Machinery-Gen Industrial industry in the last one year. The company’s shares have increased 19.27% compared with the industry’s gain of 34.49% during the period.
However, we believe that Roper’s asset-light business model and robust M&A activity will likely boostits business. The acquisitions of Deltek and ConstructConnect and winning New York City’s MTA project are significant positives. The company's strong dividend policy is also an added positive.
Currently, Roper has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>