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Roper (ROP) Q2 Earnings & Revenues Top Estimates, Decline Y/Y
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Roper Technologies, Inc. (ROP - Free Report) has delivered an earnings and revenues surprise of 10.1% and 3.8%, respectively, in second-quarter 2020.
Adjusted earnings were $2.94 per share, surpassing the Zacks Consensus Estimate of $2.67. However, the bottom line decreased 4.2% from the year-ago quarter number of $3.07 per share.
Inside the Headlines
Roper’s net revenues were $1,305 million, down 1.9% year over year. Notably, adjusted revenues totaled $1,306 million, down 2% year over year. The decline was primarily attributable to a decrease of 3% in organic revenues, partially offset by 1% gain from acquired assets. The top line beat the Zacks Consensus Estimate of $1,257 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below.
Application Software’s revenues totaled $398.4 million, representing 30.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 2%.
Network Software & Systems generated revenues of $422 million, accounting for 32.3% of second-quarter revenues. Sales grew 15% year over year.
Measurement & Analytical Solutions generated revenues of $363.9 million, accounting for 27.9% of the quarter’s revenues. Sales declined 10.9% year over year.
Process Technologies generated revenues of $120.7 million, accounting for 9.3% of the quarter’s revenues. Sales were down 26.6% year over year.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
In the second quarter, Roper’s cost of sales decreased 4% year over year to $461.3 million. Cost of sales was 35.3% of the quarter’s revenues compared with 36.1% a year ago. Adjusted gross profit decreased 1% to $845 million, while adjusted gross margin was 64.7%, reflecting an expansion of 70 basis points (bps).
Selling, general and administrative expenses increased 5.9% to $510.1 million. It represented 39.1% of total revenues compared with 36.2% in the year-ago quarter. Operating profit declined 7.5% to $383.9 million, with margin of 29.4%, down 180 bps year over year.
Balance Sheet & Cash Flow
Exiting the second quarter, Roper had cash and cash equivalents of $1,870.8 million compared with $709.7 million recorded on Dec 31, 2019. Long-term debt (net of current portion) was $5,263.8 million compared with $4,673.1 million at the end of 2019.
In the first six months of 2020, the company generated net cash of $813 million from operating activities, up 37.5% year over year.
Capital expenditure during the second quarter totaled $8 million, lower than the year-ago figure of $12 million. Adjusted free cash flow in the quarter was up 10% to $315 million on a year-over-year basis.
Outlook
For 2020, adjusted earnings per share are anticipated to be $11.90-$12.40 compared with $11.60-$12.60 mentioned earlier.
For the third quarter of 2020, earnings are projected to be $2.90-$3.00 per share.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are Griffon Corporation (GFF - Free Report) , Danaher Corporation (DHR - Free Report) and Macquarie Infrastructure Company . While Griffon and Danaher currently sport a Zacks Rank #1 (Strong Buy), Macquarie carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Griffon delivered an earnings surprise of 21.76%, on average, in the trailing four quarters.
Danaher delivered an earnings surprise of 10.83%, on average, in the trailing four quarters.
Macquarie delivered an earnings surprise of 3.13%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Roper (ROP) Q2 Earnings & Revenues Top Estimates, Decline Y/Y
Roper Technologies, Inc. (ROP - Free Report) has delivered an earnings and revenues surprise of 10.1% and 3.8%, respectively, in second-quarter 2020.
Adjusted earnings were $2.94 per share, surpassing the Zacks Consensus Estimate of $2.67. However, the bottom line decreased 4.2% from the year-ago quarter number of $3.07 per share.
Inside the Headlines
Roper’s net revenues were $1,305 million, down 1.9% year over year. Notably, adjusted revenues totaled $1,306 million, down 2% year over year. The decline was primarily attributable to a decrease of 3% in organic revenues, partially offset by 1% gain from acquired assets. The top line beat the Zacks Consensus Estimate of $1,257 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below.
Application Software’s revenues totaled $398.4 million, representing 30.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 2%.
Network Software & Systems generated revenues of $422 million, accounting for 32.3% of second-quarter revenues. Sales grew 15% year over year.
Measurement & Analytical Solutions generated revenues of $363.9 million, accounting for 27.9% of the quarter’s revenues. Sales declined 10.9% year over year.
Process Technologies generated revenues of $120.7 million, accounting for 9.3% of the quarter’s revenues. Sales were down 26.6% year over year.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
Margin Details
In the second quarter, Roper’s cost of sales decreased 4% year over year to $461.3 million. Cost of sales was 35.3% of the quarter’s revenues compared with 36.1% a year ago. Adjusted gross profit decreased 1% to $845 million, while adjusted gross margin was 64.7%, reflecting an expansion of 70 basis points (bps).
Selling, general and administrative expenses increased 5.9% to $510.1 million. It represented 39.1% of total revenues compared with 36.2% in the year-ago quarter. Operating profit declined 7.5% to $383.9 million, with margin of 29.4%, down 180 bps year over year.
Balance Sheet & Cash Flow
Exiting the second quarter, Roper had cash and cash equivalents of $1,870.8 million compared with $709.7 million recorded on Dec 31, 2019. Long-term debt (net of current portion) was $5,263.8 million compared with $4,673.1 million at the end of 2019.
In the first six months of 2020, the company generated net cash of $813 million from operating activities, up 37.5% year over year.
Capital expenditure during the second quarter totaled $8 million, lower than the year-ago figure of $12 million. Adjusted free cash flow in the quarter was up 10% to $315 million on a year-over-year basis.
Outlook
For 2020, adjusted earnings per share are anticipated to be $11.90-$12.40 compared with $11.60-$12.60 mentioned earlier.
For the third quarter of 2020, earnings are projected to be $2.90-$3.00 per share.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are Griffon Corporation (GFF - Free Report) , Danaher Corporation (DHR - Free Report) and Macquarie Infrastructure Company . While Griffon and Danaher currently sport a Zacks Rank #1 (Strong Buy), Macquarie carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Griffon delivered an earnings surprise of 21.76%, on average, in the trailing four quarters.
Danaher delivered an earnings surprise of 10.83%, on average, in the trailing four quarters.
Macquarie delivered an earnings surprise of 3.13%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>