IDEX Corporation (IEX - Free Report) reported impressive fourth-quarter 2022 results. The company’s earnings surpassed the Zacks Consensus Estimate by 1.5%, whereas sales beat the same by 4.9%.
In the reported quarter, IDEX’s adjusted earnings were $2.01 per share, beating the Zacks Consensus Estimate of $1.98. Our estimate for fourth-quarter adjusted earnings was $1.94. On a year-over-year basis, the bottom line increased 29.7% from the year-ago quarter’s $1.55. Healthy segmental results favorably impacted the quarter’s earnings.
Earnings for the fourth quarter exceeded management’s projection of $1.92-$1.97.
Revenue Details
In the quarter under review, IDEX’s net sales were $810.7 million, reflecting year-over-year growth of 13.4%. Organic sales in the quarter increased 12% year over year, higher than 9% growth expected by IEX. Acquired assets boosted sales 5%. Foreign currency translation left a negative impact of 4%.
IDEX’s top line surpassed the Zacks Consensus Estimate of $773 million. Our estimate for net sales in the reported quarter was $756.3 million.
IEX reports net sales under three business segments, the results of which are discussed below:
Revenues from Fluid & Metering Technologies totaled $287.8 million, increasing 12.2% year over year. Our estimate for segmental revenues was $277.2 million. Organic sales were up 9% and synergies from acquired assets added 8%. Foreign currency translation left a negative impact of 3%.
Revenues from Health & Science Technologies totaled $353 million, reflecting year-over-year growth of 20%. Our estimate for segmental revenues was $313.7 million. Organic sales in the quarter increased 19% year over year, while acquired assets boosted sales 5%. Foreign currency translation left a negative impact of 4%.
Revenues from Fire & Safety/Diversified Products totaled $170.9 million, rising 1.4% year over year. Our estimate for segmental revenues was $166.3 million. The results were aided by a 6% increase in organic sales but suffered 5% forex woes.
Margin Profile
In the quarter under review, IDEX’s cost of sales increased 16.1% year over year to $465.0 million. The adjusted gross profit was $353.8 million, up 12.6% year over year, while the adjusted gross margin was 43.6% compared with 44% reported in the year-ago quarter.
Selling, general and administrative expenses increased 10% year over year to $169 million. The same represented 20.8% of revenues. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter under review increased 13.9% year over year to $218.9 million. The adjusted EBITDA margin increased 10 bps year over year to 29%.
The adjusted operating income was $184.8 million, up 13.6% year over year, whereas the margin was 22.8%, flat year over year. Interest expenses in the quarter increased 26% year over year to $12.1 million.
Balance Sheet and Cash Flow
While exiting the fourth quarter, IDEX’s cash and cash equivalents decreased 49.7% to $430.2 million compared with $855.4 million recorded at the end of fourth-quarter 2021. Long-term borrowings were $1,468.7 million compared with $1,190.3 million recorded at the end of fourth-quarter 2021.
In the twelve months of 2022, IDEX generated net cash of $557.4 million from operating activities, decreasing 1.4% from the year-ago period. Capital used for purchasing property, plant and equipment was $68 million compared with $72.7 million in 2021. Free cash flow was $489.4 million, down 0.6% year over year.
IEX paid out dividends totaling $177.4 million and repurchased common stocks worth $148.1 million.
The amount spent on acquisitions, net of acquired cash, totaled $945.6 million.
Outlook
For first-quarter 2023, IDEX anticipates adjusted earnings of $1.98-$2.03 per share and 3-5% growth in organic sales from the respective year-ago readings.
IEX predicts EPS of $1.74-$1.79 per share for fourth-quarter 2022.
For 2023, IDEX anticipates adjusted earnings of $8.50-$8.80 per share. Full-year earnings are predicted to be $7.55-$7.85.
Organic sales are predicted to grow 1-5% for 2023.
Zacks Rank & Other Stocks to Consider
IEX currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.1%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
AIT’s earnings estimates have increased 6.5% for fiscal 2023 (ending June 2023) in the past 60 days. Shares of Applied Industrial have risen 41.9% in the past six months.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 8.8%, on average.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 14.4% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 22.4% in the past six months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
IDEX Corporation (IEX - Free Report) reported impressive fourth-quarter 2022 results. The company’s earnings surpassed the Zacks Consensus Estimate by 1.5%, whereas sales beat the same by 4.9%.
In the reported quarter, IDEX’s adjusted earnings were $2.01 per share, beating the Zacks Consensus Estimate of $1.98. Our estimate for fourth-quarter adjusted earnings was $1.94. On a year-over-year basis, the bottom line increased 29.7% from the year-ago quarter’s $1.55. Healthy segmental results favorably impacted the quarter’s earnings.
Earnings for the fourth quarter exceeded management’s projection of $1.92-$1.97.
Revenue Details
In the quarter under review, IDEX’s net sales were $810.7 million, reflecting year-over-year growth of 13.4%. Organic sales in the quarter increased 12% year over year, higher than 9% growth expected by IEX. Acquired assets boosted sales 5%. Foreign currency translation left a negative impact of 4%.
IDEX’s top line surpassed the Zacks Consensus Estimate of $773 million. Our estimate for net sales in the reported quarter was $756.3 million.
IEX reports net sales under three business segments, the results of which are discussed below:
Revenues from Fluid & Metering Technologies totaled $287.8 million, increasing 12.2% year over year. Our estimate for segmental revenues was $277.2 million. Organic sales were up 9% and synergies from acquired assets added 8%. Foreign currency translation left a negative impact of 3%.
Revenues from Health & Science Technologies totaled $353 million, reflecting year-over-year growth of 20%. Our estimate for segmental revenues was $313.7 million. Organic sales in the quarter increased 19% year over year, while acquired assets boosted sales 5%. Foreign currency translation left a negative impact of 4%.
Revenues from Fire & Safety/Diversified Products totaled $170.9 million, rising 1.4% year over year. Our estimate for segmental revenues was $166.3 million. The results were aided by a 6% increase in organic sales but suffered 5% forex woes.
Margin Profile
In the quarter under review, IDEX’s cost of sales increased 16.1% year over year to $465.0 million. The adjusted gross profit was $353.8 million, up 12.6% year over year, while the adjusted gross margin was 43.6% compared with 44% reported in the year-ago quarter.
Selling, general and administrative expenses increased 10% year over year to $169 million. The same represented 20.8% of revenues. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter under review increased 13.9% year over year to $218.9 million. The adjusted EBITDA margin increased 10 bps year over year to 29%.
The adjusted operating income was $184.8 million, up 13.6% year over year, whereas the margin was 22.8%, flat year over year. Interest expenses in the quarter increased 26% year over year to $12.1 million.
Balance Sheet and Cash Flow
While exiting the fourth quarter, IDEX’s cash and cash equivalents decreased 49.7% to $430.2 million compared with $855.4 million recorded at the end of fourth-quarter 2021. Long-term borrowings were $1,468.7 million compared with $1,190.3 million recorded at the end of fourth-quarter 2021.
In the twelve months of 2022, IDEX generated net cash of $557.4 million from operating activities, decreasing 1.4% from the year-ago period. Capital used for purchasing property, plant and equipment was $68 million compared with $72.7 million in 2021. Free cash flow was $489.4 million, down 0.6% year over year.
IEX paid out dividends totaling $177.4 million and repurchased common stocks worth $148.1 million.
The amount spent on acquisitions, net of acquired cash, totaled $945.6 million.
Outlook
For first-quarter 2023, IDEX anticipates adjusted earnings of $1.98-$2.03 per share and 3-5% growth in organic sales from the respective year-ago readings.
IEX predicts EPS of $1.74-$1.79 per share for fourth-quarter 2022.
For 2023, IDEX anticipates adjusted earnings of $8.50-$8.80 per share. Full-year earnings are predicted to be $7.55-$7.85.
Organic sales are predicted to grow 1-5% for 2023.
Zacks Rank & Other Stocks to Consider
IEX currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.1%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
AIT’s earnings estimates have increased 6.5% for fiscal 2023 (ending June 2023) in the past 60 days. Shares of Applied Industrial have risen 41.9% in the past six months.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 8.8%, on average.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 14.4% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 22.4% in the past six months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on VMI - FREE
Get the latest research report on AIT - FREE
Get the latest research report on IEX - FREE
Get the latest research report on ALLE - FREE