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Roper's (ROP) Q1 Earnings and Revenues Surpass Estimates

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Roper Technologies, Inc. (ROP - Free Report) has reported better-than-expected first-quarter 2021 results, with earnings surpassing estimates by 8.4% and sales beating the same by 1.3%.

The company’s adjusted earnings in the first quarter were $3.60 per share, surpassing the Zacks Consensus Estimate of $3.32. On a year-over-year basis, earnings jumped 18% from $3.05.

Revenue Details

In the reported quarter, Roper’s net revenues amounted to $1,528.6 million, up 13.2% year over year. Notably, adjusted revenues increased 13% year over year to $1,530 million. Organic revenues in the quarter decreased 1%, while acquisitions/divestitures and foreign currency translation had positive impacts of 12% and 1%, respectively.

Roper’s top line surpassed the Zacks Consensus Estimate of $1,509 million.

The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:

Application Software’s revenues totaled $576.6 million, representing 37.7% of the quarter’s top line. On a year-over-year basis, the segment’s revenues grew 42.3%.

Network Software & Systems generated revenues of $440.2 million, accounting for 28.8% of first-quarter revenues. The top line was up 0.5% year over year.

Measurement & Analytical Solutions generated revenues of $381 million, accounting for 24.9% of the quarter’s revenues. Sales grew 4.3% year over year.

Process Technologies generated revenues of $130.8 million, accounting for 8.6% of the quarter’s revenues. Sales were down 8% year over year.

Margin Profile

In the reported quarter, Roper’s cost of sales increased 8.3% year over year to $534.8 million. Cost of sales was 35% of the quarter’s net sales. Gross profit (adjusted) in the quarter grew 16% year over year to $995 million, while adjusted gross margin increased 150 basis points (bps) to 65%.

Selling, general and administrative expenses increased 16.9% year over year to $593.3 million. It represented 38.8% of net sales in the reported quarter. Adjusted earnings before interest, tax, depreciation and amortization were $561 million, reflecting year-over-year growth of 20.1%. Margin increased 220 bps to 36.7%. Interest expenses expanded 33.5% year over year to $60.6 million.

Balance Sheet & Cash Flow

Exiting the first quarter, Roper had cash and cash equivalents of $331 million, up 7.4% from $308.3 million recorded in the last reported quarter. Long-term debt fell 5.4% sequentially to $8,571.8 million.

During the quarter, the company’s payments under the revolving line of credit were $495 million.

The company generated net cash of $559.6 million from operating activities in the first three months of 2021, reflecting an increase of 53.8% from the year-ago comparable period. Capital expenditure totaled $9.1 million compared with $7.9 million a year ago. Free cash flow increased 54% to $543 million.
 
The company rewarded shareholders with a dividend payout of $58.8 million. The amount represents growth from $53.1 million distributed in the year-ago quarter.

Outlook

The company expects cash flow generation to be impressive in 2021 Also, Roper remains optimistic about the signs of recovery across the end markets, which were affected by the coronavirus pandemic. Further, synergistic gains from acquired assets are expected to be favorable.

For 2021, the company currently anticipates adjusted earnings of $14.75-$15.00 per share, higher than $14.35-$14.75 guided earlier.

For the second quarter, the adjusted earnings is projected to be $3.61-$3.65 per share.

Roper Technologies, Inc. Price, Consensus and EPS Surprise

Roper Technologies, Inc. Price, Consensus and EPS Surprise

Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Astec Industries, Inc. (ASTE - Free Report) , Dover Corporation (DOV - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Astec Industries currently sports a Zacks Rank #1 (Strong Buy), Dover and Applied Industrial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Astec Industries delivered a positive earnings surprise of 172.72%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 21.35%, on average, in the trailing four quarters.

Applied Industrial delivered a positive earnings surprise of 21.92%, on average, in the trailing four quarters.

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