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IDEX (IEX) Q1 Earnings Beat on Solid Organic Growth, View Up
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IDEX Corporation (IEX - Free Report) reported strong first-quarter 2018 results with all-time high revenues, operating income and earnings driven by healthy organic growth and diligent execution of operational plans. GAAP earnings for the reported quarter were $99 million or $1.27 per share compared with $75.9 million or 99 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding restructuring and other non-recurring items, adjusted earnings for the reported quarter were $1.29 per share, which beat the Zacks Consensus Estimate of $1.24.
IDEX Corporation Price, Consensus and EPS Surprise
Net sales in the reported quarter came in at $612.3 million compared with $553.6 million in the year-ago quarter. Quarterly sales exceeded the Zacks Consensus Estimate of $601 million. The top-line increase was primarily attributable to organic growth of 7%. Investments in product innovations, business development and reallocation of resources led to growth in revenues across all segments of the company, which helped drive total revenues.
Segmental Details
Net sales of Fluid & Metering Technologies (FMT) were $232.3 million compared with $216.8 million in the prior-year quarter primarily led by organic growth of 5% in the quarter. The company recorded impressive performance in its pump business with double-digit increase in both orders and sales year over year owing to improved oil prices.
Aggregate quarterly revenues from Health & Science Technologies (HST) came in at $221.1 million compared with $199.7 million in the year-ago quarter, driven by organic growth of 8% and solid IVD/BIO end markets.
Fire & Safety/Diversified Products (FSDP) revenues were $159.2 million, up from $137.4 million in the year-ago quarter with organic growth of 12%, new product launches and program wins.
Margins
Adjusted operating income for the reported quarter was $138.3 million compared with $120.5 million in the year-ago period with respective margins of 22.6% and 21.8%. The increase in adjusted operating income, despite rise in operating expenses, was primarily due to significant top-line growth. Adjusted EBITDA (earnings before interest, taxes depreciation and amortization) was $163.8 million with adjusted EBITDA margin of 26.8% compared with $141.5 million and 25.6%, respectively, in the year-ago period.
Adjusted operating income for FMT increased to $66.3 million from $59.4 million with respective margins of 28.5% and 27.4% on robust performance in industrial valve business in China and healthy pump sales.
Adjusted operating income of HST was $52.9 million compared with $45.3 million for respective margins of 23.9% and 22.7% on higher volume and productivity initiatives.
Adjusted operating profit of FSDP increased to $39.7 million from $32.7 million for margins of 24.9% and 23.8%, respectively, with solid project activities and strength in OEM business.
Balance Sheet and Cash Flow
IDEX exited the quarter with cash and cash equivalents of $413 million and long-term debt of $859.7 million. For the first three months of 2018, the company generated net cash of $71.7 million from its operating activities, down from $85 million recorded in the prior-year period. Free cash flow for the quarter was $61.7 million, down 18% owing to higher operating working capital.
Outlook Raised
IDEX is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has increased its earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $5.05-$5.20 per share range, up from $4.90-$5.10 expected earlier on organic growth of 5-6%.
Ingersoll-Rand has an expected long-term earnings growth rate of 10.5%. It has a positive earnings surprise history with an average of 3.9% in the trailing four quarters, beating estimates thrice.
Atlas Copco has an expected long-term earnings growth rate of 12.5%. It has a positive earnings surprise history with an average of 5.8% in the trailing four quarters, beating estimates twice.
Altra Industrial Motion Corp exceeded estimates thrice in the trailing four quarters with an average beat of 5.1%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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IDEX (IEX) Q1 Earnings Beat on Solid Organic Growth, View Up
IDEX Corporation (IEX - Free Report) reported strong first-quarter 2018 results with all-time high revenues, operating income and earnings driven by healthy organic growth and diligent execution of operational plans. GAAP earnings for the reported quarter were $99 million or $1.27 per share compared with $75.9 million or 99 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding restructuring and other non-recurring items, adjusted earnings for the reported quarter were $1.29 per share, which beat the Zacks Consensus Estimate of $1.24.
IDEX Corporation Price, Consensus and EPS Surprise
IDEX Corporation Price, Consensus and EPS Surprise | IDEX Corporation Quote
Net sales in the reported quarter came in at $612.3 million compared with $553.6 million in the year-ago quarter. Quarterly sales exceeded the Zacks Consensus Estimate of $601 million. The top-line increase was primarily attributable to organic growth of 7%. Investments in product innovations, business development and reallocation of resources led to growth in revenues across all segments of the company, which helped drive total revenues.
Segmental Details
Net sales of Fluid & Metering Technologies (FMT) were $232.3 million compared with $216.8 million in the prior-year quarter primarily led by organic growth of 5% in the quarter. The company recorded impressive performance in its pump business with double-digit increase in both orders and sales year over year owing to improved oil prices.
Aggregate quarterly revenues from Health & Science Technologies (HST) came in at $221.1 million compared with $199.7 million in the year-ago quarter, driven by organic growth of 8% and solid IVD/BIO end markets.
Fire & Safety/Diversified Products (FSDP) revenues were $159.2 million, up from $137.4 million in the year-ago quarter with organic growth of 12%, new product launches and program wins.
Margins
Adjusted operating income for the reported quarter was $138.3 million compared with $120.5 million in the year-ago period with respective margins of 22.6% and 21.8%. The increase in adjusted operating income, despite rise in operating expenses, was primarily due to significant top-line growth. Adjusted EBITDA (earnings before interest, taxes depreciation and amortization) was $163.8 million with adjusted EBITDA margin of 26.8% compared with $141.5 million and 25.6%, respectively, in the year-ago period.
Adjusted operating income for FMT increased to $66.3 million from $59.4 million with respective margins of 28.5% and 27.4% on robust performance in industrial valve business in China and healthy pump sales.
Adjusted operating income of HST was $52.9 million compared with $45.3 million for respective margins of 23.9% and 22.7% on higher volume and productivity initiatives.
Adjusted operating profit of FSDP increased to $39.7 million from $32.7 million for margins of 24.9% and 23.8%, respectively, with solid project activities and strength in OEM business.
Balance Sheet and Cash Flow
IDEX exited the quarter with cash and cash equivalents of $413 million and long-term debt of $859.7 million. For the first three months of 2018, the company generated net cash of $71.7 million from its operating activities, down from $85 million recorded in the prior-year period. Free cash flow for the quarter was $61.7 million, down 18% owing to higher operating working capital.
Outlook Raised
IDEX is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has increased its earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $5.05-$5.20 per share range, up from $4.90-$5.10 expected earlier on organic growth of 5-6%.
Zacks Rank & Other Stocks to Consider
IDEX currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include Ingersoll-Rand Plc (IR - Free Report) , Atlas Copco AB (ATLKY - Free Report) and Altra Industrial Motion Corp. , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ingersoll-Rand has an expected long-term earnings growth rate of 10.5%. It has a positive earnings surprise history with an average of 3.9% in the trailing four quarters, beating estimates thrice.
Atlas Copco has an expected long-term earnings growth rate of 12.5%. It has a positive earnings surprise history with an average of 5.8% in the trailing four quarters, beating estimates twice.
Altra Industrial Motion Corp exceeded estimates thrice in the trailing four quarters with an average beat of 5.1%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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