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Badger Meter (BMI) Q1 Earnings Top Estimates, Revenues Up Y/Y
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Badger Meter, Inc. (BMI - Free Report) reported mixed first-quarter 2021 results, with top line missing the Zacks Consensus Estimate but the bottom line surpassing the same. Despite record order momentum and impressive sales growth, the stock declined 6.3% to close at $90.57 on Apr 20.
Net Income
Net earnings in the reported quarter were $13.8 million or 47 cents per share compared with $11.9 million or 41 cents per share in the year-ago quarter. The year-over-year improvement can be primarily attributed to higher revenues. Moreover, the bottom line beat the Zacks Consensus Estimate by 4 cents.
Badger Meter, Inc. Price, Consensus and EPS Surprise
With strong momentum, quarterly net sales increased to $117.8 million from $108.5 million in the year-ago quarter. The 8.6% revenue growth was primarily due to a record surge in order rates with fast-tracked adoption of smart water offerings among customers. Market recovery of global flow instrumentation played a vital role as well. The company also benefited from strategic value-based pricing actions and witnessed a favorable mix of high-end products and services along with higher BEACON Software as a Service (SaaS) revenues. However, the top line missed the consensus mark of $121 million.
As the pandemic lockdown eased, utility water sales rose 12% owing to the acquisitions of s::can and Analytical Technologies, Inc (“ATi”). The company witnessed record-high order backlog, owing to manufacturing disruptions from electronic component shortages and logistics challenges. Flow instrumentation sales declined 3% year over year. However, with majority of industrial end markets experiencing recovering demand trends, the segment is expected to witness sales growth in the upcoming quarters.
Other Details
Gross profit was $49.4 million, up 13.9% from $43.3 million in the year-earlier quarter. Gross margin was 41.9%, up 200 basis points. The upside was primarily driven by higher SaaS revenues with favorable product sales and acquisition mix. Value-based pricing initiatives drove the margin as well. Operating earnings were $17.7 million or 15.1% of sales compared with respective tallies of $16 million and 14.8% in the year-earlier quarter.
Selling, engineering and administration expenses were $31.6 million compared with $27.3 million in the prior-year quarter. The increase was primarily due to the inclusion of s::can and ATi coupled with higher personnel costs. However, it was partially offset by lower travel and other pandemic-related expenses.
Cash Flow & Liquidity
During the first three months of 2021, Badger Meter generated $30.6 million of net cash from operations compared with $30.5 million in the prior-year period, driven by strong earnings conversion. Free cash flow in the quarter improved 0.7% to $28.8 million.
With robust free cash flow generation, the company’s performance was driven by a solid balance sheet position along with an effective working capital management. As of Mar 31, the company had $51.4 million of cash and cash equivalents with $71.8 million of total current liabilities.
Moving Forward
With the gradual stabilization of overall end-market activities post lockdowns, Badger Meter’s near-term outlook remains bullish. The Milwaukee, WI-based controls products manufacturer expects to witness solid backlog and bid pipeline on the back of increasing orders in the forthcoming quarters. This will eventually help the company to ensure smooth functioning of business operations.
Macro trends continue to drive the adoption of digital smart water solutions. Value-based pricing initiatives will also help in mitigating the surge in brass costs. Although logistics challenges serve as a prime headwind, effective sourcing and supply chain management are expected to enhance Badger Meter’s operational agility. It remains committed to delivering critical products and services to its diversified customer base during this hour of crisis.
The company is well poised to enable strategic, tuck-in mergers and acquisitions to augment offerings across global markets with a strong liquidity position. It is focused on investing in digital solutions that operationalize real-time data and utilize remote solutions to reduce overall costs and enhance efficiency. For additional financial flexibility, the company has $125 million under revolving credit facility to fund capital allocation priorities. Customer demand is anticipated to be the crux of product and technology roadmap, with competitive share and positioning. Continued R&D investments with inventory planning capabilities are likely to provide potential opportunities in the future.
Zacks Rank & Stocks to Consider
Badger Meter currently carries a Zacks Rank #2 (Buy).
Woodward delivered a trailing four-quarter positive earnings surprise of 34.6%, on average.
Waters Corporation delivered a trailing four-quarter positive earnings surprise of 14.6%, on average.
Agilent Technologies delivered a trailing four-quarter positive earnings surprise of 16.9%, on average.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Badger Meter (BMI) Q1 Earnings Top Estimates, Revenues Up Y/Y
Badger Meter, Inc. (BMI - Free Report) reported mixed first-quarter 2021 results, with top line missing the Zacks Consensus Estimate but the bottom line surpassing the same. Despite record order momentum and impressive sales growth, the stock declined 6.3% to close at $90.57 on Apr 20.
Net Income
Net earnings in the reported quarter were $13.8 million or 47 cents per share compared with $11.9 million or 41 cents per share in the year-ago quarter. The year-over-year improvement can be primarily attributed to higher revenues. Moreover, the bottom line beat the Zacks Consensus Estimate by 4 cents.
Badger Meter, Inc. Price, Consensus and EPS Surprise
Badger Meter, Inc. price-consensus-eps-surprise-chart | Badger Meter, Inc. Quote
Revenues
With strong momentum, quarterly net sales increased to $117.8 million from $108.5 million in the year-ago quarter. The 8.6% revenue growth was primarily due to a record surge in order rates with fast-tracked adoption of smart water offerings among customers. Market recovery of global flow instrumentation played a vital role as well. The company also benefited from strategic value-based pricing actions and witnessed a favorable mix of high-end products and services along with higher BEACON Software as a Service (SaaS) revenues. However, the top line missed the consensus mark of $121 million.
As the pandemic lockdown eased, utility water sales rose 12% owing to the acquisitions of s::can and Analytical Technologies, Inc (“ATi”). The company witnessed record-high order backlog, owing to manufacturing disruptions from electronic component shortages and logistics challenges. Flow instrumentation sales declined 3% year over year. However, with majority of industrial end markets experiencing recovering demand trends, the segment is expected to witness sales growth in the upcoming quarters.
Other Details
Gross profit was $49.4 million, up 13.9% from $43.3 million in the year-earlier quarter. Gross margin was 41.9%, up 200 basis points. The upside was primarily driven by higher SaaS revenues with favorable product sales and acquisition mix. Value-based pricing initiatives drove the margin as well. Operating earnings were $17.7 million or 15.1% of sales compared with respective tallies of $16 million and 14.8% in the year-earlier quarter.
Selling, engineering and administration expenses were $31.6 million compared with $27.3 million in the prior-year quarter. The increase was primarily due to the inclusion of s::can and ATi coupled with higher personnel costs. However, it was partially offset by lower travel and other pandemic-related expenses.
Cash Flow & Liquidity
During the first three months of 2021, Badger Meter generated $30.6 million of net cash from operations compared with $30.5 million in the prior-year period, driven by strong earnings conversion. Free cash flow in the quarter improved 0.7% to $28.8 million.
With robust free cash flow generation, the company’s performance was driven by a solid balance sheet position along with an effective working capital management. As of Mar 31, the company had $51.4 million of cash and cash equivalents with $71.8 million of total current liabilities.
Moving Forward
With the gradual stabilization of overall end-market activities post lockdowns, Badger Meter’s near-term outlook remains bullish. The Milwaukee, WI-based controls products manufacturer expects to witness solid backlog and bid pipeline on the back of increasing orders in the forthcoming quarters. This will eventually help the company to ensure smooth functioning of business operations.
Macro trends continue to drive the adoption of digital smart water solutions. Value-based pricing initiatives will also help in mitigating the surge in brass costs. Although logistics challenges serve as a prime headwind, effective sourcing and supply chain management are expected to enhance Badger Meter’s operational agility. It remains committed to delivering critical products and services to its diversified customer base during this hour of crisis.
The company is well poised to enable strategic, tuck-in mergers and acquisitions to augment offerings across global markets with a strong liquidity position. It is focused on investing in digital solutions that operationalize real-time data and utilize remote solutions to reduce overall costs and enhance efficiency. For additional financial flexibility, the company has $125 million under revolving credit facility to fund capital allocation priorities. Customer demand is anticipated to be the crux of product and technology roadmap, with competitive share and positioning. Continued R&D investments with inventory planning capabilities are likely to provide potential opportunities in the future.
Zacks Rank & Stocks to Consider
Badger Meter currently carries a Zacks Rank #2 (Buy).
Some top-ranked stocks in the broader industry are Woodward, Inc. (WWD - Free Report) , Waters Corporation (WAT - Free Report) and Agilent Technologies, Inc. (A - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Woodward delivered a trailing four-quarter positive earnings surprise of 34.6%, on average.
Waters Corporation delivered a trailing four-quarter positive earnings surprise of 14.6%, on average.
Agilent Technologies delivered a trailing four-quarter positive earnings surprise of 16.9%, on average.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>