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Roper Technologies (ROP) Beats on Q2 Earnings, Raises View
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Roper Technologies, Inc. (ROP - Free Report) reported second-quarter 2018 adjusted earnings of $2.89 per share, which beat the Zacks Consensus Estimate of $2.70 and improved 29% on a year-over-year basis.
Adjusted revenues of $1,293.7 million increased 13% year over year, topping the Zacks Consensus Estimate of $1,233 million. Organic revenues grew 9% while acquisitions/divestitures contributed 2% to top-line growth.
Roper enjoyed solid operational execution and broad-based growth in all its segments. In the reported quarter, the company completed the buyout of PowerPlan, a major provider of software and solution for asset-centric businesses.
Segmental Details
For the quarter, Medical & Scientific Imaging revenues increased 6.5% year over year to $373.7 million while RF Technology revenues grew 16.7% to $537.4 million.
Industrial Technology revenues jumped 20% year over year to $231.6 million. Moreover, revenues from Energy Systems & Controls grew 15.7% to $151 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
In the quarter, adjusted gross margin expanded 40 basis points (bps) to 63.1% on a year- over-year basis.
Segment wise, RF Technology, Energy Systems & Controls and Industrial Technology gross margins expanded 340 bps, 120 bps and 40 bps, respectively. However, Medical & Scientific Imaging gross margin contracted 130 bps.
Guidance
Buoyed by the robust performance, Roper raised 2018 guidance. The company expects adjusted earnings between $11.40 and $11.56, up from the previous range of $11.08 and $11.32.
For third-quarter 2018, Roper projects adjusted earnings between $2.89 and $2.95 per share.
Conclusion
Roper holds a dominant position in most of the markets where it operates. The company has an optimum mix of highly-engineered and niche-oriented products, which help it gain market share.
Also, the company's unique asset-light business model makes it less dependent on large-scale production equipment. We are also optimistic about its expansion strategy, primarily through accretive acquisitions.
However, over the past several quarters, rising cost of goods sold remained a major concern for the company, which may continue hurting its margins.
Chart Industries surpassed estimates in each of the trailing four quarters with an average beat of 29.36%.
Welbilt exceeded estimates thrice in the trailing four quarters with an average beat of 14.60%.
Graco surpassed estimates twice in the trailing four quarters with an average beat of 4.26%.
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.
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Roper Technologies (ROP) Beats on Q2 Earnings, Raises View
Roper Technologies, Inc. (ROP - Free Report) reported second-quarter 2018 adjusted earnings of $2.89 per share, which beat the Zacks Consensus Estimate of $2.70 and improved 29% on a year-over-year basis.
Adjusted revenues of $1,293.7 million increased 13% year over year, topping the Zacks Consensus Estimate of $1,233 million. Organic revenues grew 9% while acquisitions/divestitures contributed 2% to top-line growth.
Roper enjoyed solid operational execution and broad-based growth in all its segments. In the reported quarter, the company completed the buyout of PowerPlan, a major provider of software and solution for asset-centric businesses.
Segmental Details
For the quarter, Medical & Scientific Imaging revenues increased 6.5% year over year to $373.7 million while RF Technology revenues grew 16.7% to $537.4 million.
Industrial Technology revenues jumped 20% year over year to $231.6 million. Moreover, revenues from Energy Systems & Controls grew 15.7% to $151 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. Price, Consensus and EPS Surprise | Roper Technologies, Inc. Quote
In the quarter, adjusted gross margin expanded 40 basis points (bps) to 63.1% on a year- over-year basis.
Segment wise, RF Technology, Energy Systems & Controls and Industrial Technology gross margins expanded 340 bps, 120 bps and 40 bps, respectively. However, Medical & Scientific Imaging gross margin contracted 130 bps.
Guidance
Buoyed by the robust performance, Roper raised 2018 guidance. The company expects adjusted earnings between $11.40 and $11.56, up from the previous range of $11.08 and $11.32.
For third-quarter 2018, Roper projects adjusted earnings between $2.89 and $2.95 per share.
Conclusion
Roper holds a dominant position in most of the markets where it operates. The company has an optimum mix of highly-engineered and niche-oriented products, which help it gain market share.
Also, the company's unique asset-light business model makes it less dependent on large-scale production equipment. We are also optimistic about its expansion strategy, primarily through accretive acquisitions.
However, over the past several quarters, rising cost of goods sold remained a major concern for the company, which may continue hurting its margins.
Zacks Rank & Stocks to Consider
Roper currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Chart Industries, Inc. (GTLS - Free Report) , Welbilt, Inc. and Graco Inc. (GGG - Free Report) . While Chart Industries sports a Zacks Rank #1 (Strong Buy), Welbilt and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chart Industries surpassed estimates in each of the trailing four quarters with an average beat of 29.36%.
Welbilt exceeded estimates thrice in the trailing four quarters with an average beat of 14.60%.
Graco surpassed estimates twice in the trailing four quarters with an average beat of 4.26%.
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 >>