Badger Meter Inc. (BMI - Free Report) posted record earnings of 25 cents per share in fourth-quarter 2017, up 19% year over year. In addition, earnings beat the Zacks Consensus Estimate of 23 cents.
Sales in the quarter increased 3.8% year over year to a record $96.7 million, but fell short of the Zacks Consensus Estimate of $97 million. The year-over-year growth was driven by the positive impact from sales of new products, higher municipal water sales volume and continued improvement in key flow instrumentation markets, such as oil and gas.
Notable, Badger Meter’s sales exceeded the $400-million threshold for the first time in 2017, primarily driven by growth of new technologies and continued improvement in industrial markets.
Cost and Margins
Cost of sales decreased 3% year over year to $57.6 million. Gross profit in the reported quarter came in at $39 million, up 16% from $33.5 million recorded in the year-earlier quarter. Gross margin came in at 40.4%, expanding 440 basis points (bps) from the year-ago quarter despite elevated brass costs.
Selling, engineering and administration expenses went up marginally to $25.9 million from $24.4 million in the prior-year quarter due to acquisition expenses, commissions and employee incentives, as well as higher professional services fees. Operating income grew 9.6% to $13.2 million from $9.1 million recorded in the comparable quarter last year. Consequently, operating margin advanced 380 bps to 13.6%.
Financial Position
Badger Meter reported cash and cash equivalents of $11.2 million at the end of fourth-quarter 2017, up from $7.3 million recorded at year-end 2016. The company recorded receivables of $58.2 million at the fourth-quarter end compared with $59.8 million as of Dec 31, 2016. Inventories were $85.2 million at the end of the reported quarter compared with $77.7 million as of Dec 31, 2016.
2017 Performance
Badger Meter reported record earnings per share of $1.19 in 2017, up 7.2% from $1.11 per share recorded in the prior year. Earnings also outpaced the Zacks Consensus Estimate of $1.18. Revenues grew 2.2% year over year to $402.4 million from $393.8 million recorded in 2016. However, it missed the Zacks Consensus Estimate of $403 million.
Outlook
Badger Meter is poised to gain from growing demand for E-Series meters and ORION cellular endpoints, as well as BEACON Advanced Metering Analytics (AMA) managed solution in the near future. It expects that its leadership position in North American water metering, improving position in global flow instrumentation technologies and a more favorable domestic tax environment will drive the company’s performance over the long run.
Share Price Performance
Over the past year, Badger Meter has outperformed the industry with respect to price performance. The stock has gained around 29.4%, while the industry recorded 25.1% growth during the same time frame.
Zacks Rank & Other Stocks to Consider
Badger Meter currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same sector are Canon Inc. , Teradyne, Inc. (TER - Free Report) and Transcat, Inc. (TRNS - Free Report) . While Canon Inc and Teradyne sport a Zacks Rank #1 (Strong Buy), Transcat carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Canon Inc has a long-term earnings growth rate of 8%. Its shares have rallied 7.2%, over the past six months.
Teradyne has a long-term earnings growth rate of 12 %. The company’s shares have been up 26.8% during the same time frame.
Transcat has a long-term earnings growth rate of 8%. The stock has gained 19% in six months’ time.
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Badger Meter Inc. (BMI - Free Report) posted record earnings of 25 cents per share in fourth-quarter 2017, up 19% year over year. In addition, earnings beat the Zacks Consensus Estimate of 23 cents.
Sales in the quarter increased 3.8% year over year to a record $96.7 million, but fell short of the Zacks Consensus Estimate of $97 million. The year-over-year growth was driven by the positive impact from sales of new products, higher municipal water sales volume and continued improvement in key flow instrumentation markets, such as oil and gas.
Notable, Badger Meter’s sales exceeded the $400-million threshold for the first time in 2017, primarily driven by growth of new technologies and continued improvement in industrial markets.
Cost and Margins
Cost of sales decreased 3% year over year to $57.6 million. Gross profit in the reported quarter came in at $39 million, up 16% from $33.5 million recorded in the year-earlier quarter. Gross margin came in at 40.4%, expanding 440 basis points (bps) from the year-ago quarter despite elevated brass costs.
Selling, engineering and administration expenses went up marginally to $25.9 million from $24.4 million in the prior-year quarter due to acquisition expenses, commissions and employee incentives, as well as higher professional services fees. Operating income grew 9.6% to $13.2 million from $9.1 million recorded in the comparable quarter last year. Consequently, operating margin advanced 380 bps to 13.6%.
Financial Position
Badger Meter reported cash and cash equivalents of $11.2 million at the end of fourth-quarter 2017, up from $7.3 million recorded at year-end 2016. The company recorded receivables of $58.2 million at the fourth-quarter end compared with $59.8 million as of Dec 31, 2016. Inventories were $85.2 million at the end of the reported quarter compared with $77.7 million as of Dec 31, 2016.
2017 Performance
Badger Meter reported record earnings per share of $1.19 in 2017, up 7.2% from $1.11 per share recorded in the prior year. Earnings also outpaced the Zacks Consensus Estimate of $1.18. Revenues grew 2.2% year over year to $402.4 million from $393.8 million recorded in 2016. However, it missed the Zacks Consensus Estimate of $403 million.
Outlook
Badger Meter is poised to gain from growing demand for E-Series meters and ORION cellular endpoints, as well as BEACON Advanced Metering Analytics (AMA) managed solution in the near future. It expects that its leadership position in North American water metering, improving position in global flow instrumentation technologies and a more favorable domestic tax environment will drive the company’s performance over the long run.
Share Price Performance
Over the past year, Badger Meter has outperformed the industry with respect to price performance. The stock has gained around 29.4%, while the industry recorded 25.1% growth during the same time frame.
Zacks Rank & Other Stocks to Consider
Badger Meter currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same sector are Canon Inc. , Teradyne, Inc. (TER - Free Report) and Transcat, Inc. (TRNS - Free Report) . While Canon Inc and Teradyne sport a Zacks Rank #1 (Strong Buy), Transcat carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Canon Inc has a long-term earnings growth rate of 8%. Its shares have rallied 7.2%, over the past six months.
Teradyne has a long-term earnings growth rate of 12 %. The company’s shares have been up 26.8% during the same time frame.
Transcat has a long-term earnings growth rate of 8%. The stock has gained 19% in six months’ time.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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 >>
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