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IDEX (IEX) Beats on Q2 Earnings & Revenues, Raises View
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Industrial goods manufacturer IDEX Corporation (IEX - Free Report) posted solid second-quarter 2017 results, driven by healthy year-over-year increase in earnings and revenues. Adjusted net income for the reported quarter was $83.8 million or $1.08 per share compared with $75.8 million or 99 cents per share in the year-earlier quarter. The year-over-year improvement was primarily due to top-line growth. Adjusted earnings exceeded the Zacks Consensus Estimate by 2 cents.
Revenues
Net sales increased to $573.4 million from $549.7 million in the year-earlier quarter with record level orders. Revenues exceeded the Zacks Consensus Estimate of $570 million.
IDEX reported organic growth of 3% in the reported quarter, owing to a diligent execution of operational plans.
Segment wise, Fluid and Metering Technologies (FMT) revenues were relatively flat year over year at $221.2 million. Health and Science Technologies (HST) revenues were $204.4 million, up 9.6% owing to accretive acquisitions and organic growth, each improving 6%. Fire and Safety/Diversified Products (FSD) recorded sales of $148 million, up 4%, primarily due to inorganic growth.
Margins
Gross margin was 44.8%, up 40 basis points (bps) from the prior-year quarter owing to productivity and volume leverage. Adjusted operating income for the reported quarter was $125.1 million with margin of 21.8%. Earnings before interest, taxes depreciation and amortization or EBITDA were $146.6 million compared with $137 million in the year-ago quarter.
The FMT segment recorded an operating margin of 27.1% in the reported quarter, up 270 bps year over year due to productivity initiatives and higher volume.
The HST segment’s adjusted operating margin came in at 22.6%, up 60 bps from the prior-year quarter. This was largely attributable to the productivity initiatives and higher volume.
The FSD segment’s adjusted operating margin was 25.1%, up 80 bps from the year-ago quarter due to the dilutive impact of acquisitions.
Balance Sheet & Cash Flow
As of Jun 30, 2017, IDEX had cash and cash equivalents of $218.4 million with long-term debt of $888.5 million. Cash flow from operating activities for the first six months of 2017 was $172.6 million in the reported quarter compared with $158.8 million in the prior-year period. Free cash flow at the quarter end totaled $78.2 million compared with $80.1 million in the year-ago period.
Guidance Raised
With solid quarterly results and robust demand patterns, IDEX raised its earlier guidance for 2017. The company currently expects 5% organic growth in 2017 with adjusted earnings of $4.18 to $4.23 per share, up from the earlier projection of 3–4% organic growth and adjusted earnings of $4.00–$4.17 per share. Third-quarter 2017 adjusted earnings are expected in the range of $1.04 to $1.06 per share on organic growth of 6%.
IDEX Corporation Price, Consensus and EPS Surprise
Omnicom has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 16.18x.
Publicis Groupe has a long-term earnings growth expectation of 12.9% and is currently trading at a forward P/E of 13.83x.
WPP plc has a long-term earnings growth expectation of 9.8% and is currently trading at a forward P/E of 12.69x.
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IDEX (IEX) Beats on Q2 Earnings & Revenues, Raises View
Industrial goods manufacturer IDEX Corporation (IEX - Free Report) posted solid second-quarter 2017 results, driven by healthy year-over-year increase in earnings and revenues. Adjusted net income for the reported quarter was $83.8 million or $1.08 per share compared with $75.8 million or 99 cents per share in the year-earlier quarter. The year-over-year improvement was primarily due to top-line growth. Adjusted earnings exceeded the Zacks Consensus Estimate by 2 cents.
Revenues
Net sales increased to $573.4 million from $549.7 million in the year-earlier quarter with record level orders. Revenues exceeded the Zacks Consensus Estimate of $570 million.
IDEX reported organic growth of 3% in the reported quarter, owing to a diligent execution of operational plans.
Segment wise, Fluid and Metering Technologies (FMT) revenues were relatively flat year over year at $221.2 million. Health and Science Technologies (HST) revenues were $204.4 million, up 9.6% owing to accretive acquisitions and organic growth, each improving 6%. Fire and Safety/Diversified Products (FSD) recorded sales of $148 million, up 4%, primarily due to inorganic growth.
Margins
Gross margin was 44.8%, up 40 basis points (bps) from the prior-year quarter owing to productivity and volume leverage. Adjusted operating income for the reported quarter was $125.1 million with margin of 21.8%. Earnings before interest, taxes depreciation and amortization or EBITDA were $146.6 million compared with $137 million in the year-ago quarter.
The FMT segment recorded an operating margin of 27.1% in the reported quarter, up 270 bps year over year due to productivity initiatives and higher volume.
The HST segment’s adjusted operating margin came in at 22.6%, up 60 bps from the prior-year quarter. This was largely attributable to the productivity initiatives and higher volume.
The FSD segment’s adjusted operating margin was 25.1%, up 80 bps from the year-ago quarter due to the dilutive impact of acquisitions.
Balance Sheet & Cash Flow
As of Jun 30, 2017, IDEX had cash and cash equivalents of $218.4 million with long-term debt of $888.5 million. Cash flow from operating activities for the first six months of 2017 was $172.6 million in the reported quarter compared with $158.8 million in the prior-year period. Free cash flow at the quarter end totaled $78.2 million compared with $80.1 million in the year-ago period.
Guidance Raised
With solid quarterly results and robust demand patterns, IDEX raised its earlier guidance for 2017. The company currently expects 5% organic growth in 2017 with adjusted earnings of $4.18 to $4.23 per share, up from the earlier projection of 3–4% organic growth and adjusted earnings of $4.00–$4.17 per share. Third-quarter 2017 adjusted earnings are expected in the range of $1.04 to $1.06 per share on organic growth of 6%.
IDEX Corporation Price, Consensus and EPS Surprise
IDEX Corporation Price, Consensus and EPS Surprise | IDEX Corporation Quote
Zacks Rank & Other Stocks to Consider
IDEX currently carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the same space include Omnicom Group Inc. (OMC - Free Report) , Publicis Groupe S.A. (PUBGY - Free Report) and WPP plc . All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Omnicom has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 16.18x.
Publicis Groupe has a long-term earnings growth expectation of 12.9% and is currently trading at a forward P/E of 13.83x.
WPP plc has a long-term earnings growth expectation of 9.8% and is currently trading at a forward P/E of 12.69x.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.See Zacks' 3 Best Stocks to Play This Trend >>