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Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2020 adjusted earnings of $5.29 per share, which beat the Zacks Consensus Estimate of $4.27. The bottom line increased 3% on a year-over-year basis and 32.3% sequentially.
Net sales of $690.7 million were down 6% on a reported basis and 4% on a currency neutral basis from the year-ago quarter. However, the top line expanded 6.4% from the prior quarter.
Notably, the top line surpassed the Zacks Consensus Estimate by 6.7%.
Impressive growth in China, and the diversity in the company’s Laboratory and Industrial businesses contributed to better-than-expected performance.
However, demand in its end markets was negatively impacted by the COVID-19 pandemic.
Nevertheless, it remains confident of margin and productivity initiatives. Further, Mettler-Toledo’s temporary cost-containment measures and declining discretionary spending are expected to aid near-term performance.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 52%, 42% and 6% of second-quarter net sales, respectively. The segments were down 4%, 3% and 11% from the year-ago quarter, respectively.
By Geography: It reports sales from Americas, Europe and Asia/Rest of the World (ROW). These regions contributed 39%, 28% and 33% to second-quarter net sales, respectively. While sales in Americas and Europe were down 7% and 5% from the year-ago quarter, respectively, the same in Asia/ROW was up 1%.
MettlerToledo International, Inc. Price, Consensus and EPS Surprise
Gross margin was 57.6%, expanding 20 basis points (bps) year over year.
Research & development (R&D) expenses were $31.2 million, down 17.3% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 7.9% year over year to $190.1 million.
As a percentage of sales, R&D as well as SG&A expenses contracted 50 and 60 bps, respectively, from the year-ago quarter.
Adjusted operating margin was 25.6%, which expanded 130 bps on a year-over year basis.
Balance Sheet and Cash Flow
As of Jun 30, 2020, the company’s cash and cash equivalent balance was $127.3 million, down from $323.6 million on Mar 31, 2020.
Long-term debt was $1.1 billion, decreasing from $1.5 billion in the first quarter.
Mettler-Toledo generated $183.2 million of cash from operating activities, up from $65.5 million in the first quarter. Free cash flow was $170 million during the reported quarter.
Guidance
For third-quarter 2020, Mettler-Toledo anticipates sales to decline between 1% and 3% on a year-over-year basis in local currency. The Zacks Consensus Estimate for sales is pegged at $686.5 million.
Adjusted earnings are anticipated in the range of $5.80-$6 per share. The Zacks Consensus Estimate for earnings is pegged at $4.92 per share.
For the full year of 2020, it anticipates sales to decline between 1% and 3% on a year-over-year basis in local currency. The Zacks Consensus Estimate for sales is pegged at $2.82 billion. Adjusted earnings are anticipated in the range of $22.70-$23.20 per share. The Zacks Consensus Estimate for the same is pegged at $21.09 per share.
Zacks Rank & Other Key Picks
Metter-Toledo currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Everbridge (EVBG - Free Report) and Analog Devices (ADI - Free Report) . While both Dropbox and Everbridge sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Dropbox and Everbridge are scheduled to report quarterly earnings on Aug 6. Analog Devices is set to release quarterly results on Aug 19.
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Mettler-Toledo (MTD) Q2 Earnings & Revenues Beat Estimates
Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2020 adjusted earnings of $5.29 per share, which beat the Zacks Consensus Estimate of $4.27. The bottom line increased 3% on a year-over-year basis and 32.3% sequentially.
Net sales of $690.7 million were down 6% on a reported basis and 4% on a currency neutral basis from the year-ago quarter. However, the top line expanded 6.4% from the prior quarter.
Notably, the top line surpassed the Zacks Consensus Estimate by 6.7%.
Impressive growth in China, and the diversity in the company’s Laboratory and Industrial businesses contributed to better-than-expected performance.
However, demand in its end markets was negatively impacted by the COVID-19 pandemic.
Nevertheless, it remains confident of margin and productivity initiatives. Further, Mettler-Toledo’s temporary cost-containment measures and declining discretionary spending are expected to aid near-term performance.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 52%, 42% and 6% of second-quarter net sales, respectively. The segments were down 4%, 3% and 11% from the year-ago quarter, respectively.
By Geography: It reports sales from Americas, Europe and Asia/Rest of the World (ROW). These regions contributed 39%, 28% and 33% to second-quarter net sales, respectively. While sales in Americas and Europe were down 7% and 5% from the year-ago quarter, respectively, the same in Asia/ROW was up 1%.
MettlerToledo International, Inc. Price, Consensus and EPS Surprise
MettlerToledo International, Inc. price-consensus-eps-surprise-chart | MettlerToledo International, Inc. Quote
Operating Results
Gross margin was 57.6%, expanding 20 basis points (bps) year over year.
Research & development (R&D) expenses were $31.2 million, down 17.3% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 7.9% year over year to $190.1 million.
As a percentage of sales, R&D as well as SG&A expenses contracted 50 and 60 bps, respectively, from the year-ago quarter.
Adjusted operating margin was 25.6%, which expanded 130 bps on a year-over year basis.
Balance Sheet and Cash Flow
As of Jun 30, 2020, the company’s cash and cash equivalent balance was $127.3 million, down from $323.6 million on Mar 31, 2020.
Long-term debt was $1.1 billion, decreasing from $1.5 billion in the first quarter.
Mettler-Toledo generated $183.2 million of cash from operating activities, up from $65.5 million in the first quarter. Free cash flow was $170 million during the reported quarter.
Guidance
For third-quarter 2020, Mettler-Toledo anticipates sales to decline between 1% and 3% on a year-over-year basis in local currency. The Zacks Consensus Estimate for sales is pegged at $686.5 million.
Adjusted earnings are anticipated in the range of $5.80-$6 per share. The Zacks Consensus Estimate for earnings is pegged at $4.92 per share.
For the full year of 2020, it anticipates sales to decline between 1% and 3% on a year-over-year basis in local currency. The Zacks Consensus Estimate for sales is pegged at $2.82 billion. Adjusted earnings are anticipated in the range of $22.70-$23.20 per share. The Zacks Consensus Estimate for the same is pegged at $21.09 per share.
Zacks Rank & Other Key Picks
Metter-Toledo currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Everbridge (EVBG - Free Report) and Analog Devices (ADI - Free Report) . While both Dropbox and Everbridge sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Dropbox and Everbridge are scheduled to report quarterly earnings on Aug 6. Analog Devices is set to release quarterly results on Aug 19.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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