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Mettler-Toledo (MTD) Q2 Earnings & Sales Beat, Increase Y/Y

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Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2021 adjusted earnings of $8.10 per share, which beat the Zacks Consensus Estimate by 6.02%. The bottom line also improved 53.1% on a year-over-year basis and 23.5% sequentially.

Net sales of $924.4 million were up 34% on a reported basis and 27% on a currency-neutral basis from the year-ago quarter. The figure was up 14.9% sequentially. The figure surpassed the Zacks Consensus Estimate of $855 million.

Solid momentum across the Laboratory, Industrial and Food Retail segments in the reported quarter drove top-line growth. Strong performance delivered by the company across all geographies remained a major positive, owing to robust customer demand.

Although headwinds related to the pandemic remain concerning for the company in the days ahead;its portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategiesare expected to remain tailwinds.

MettlerToledo International, Inc. Price, Consensus and EPS Surprise

 

MettlerToledo International, Inc. Price, Consensus and EPS Surprise

MettlerToledo International, Inc. price-consensus-eps-surprise-chart | MettlerToledo International, Inc. Quote

Top Line in Detail

By Segments: The company reports under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 55%, 40% and 5% of the net sales in the second quarter, respectively. The Laboratory, Industrial and Food Retail segments witnessed year-over-year growth of 35%, 20% and 5%, respectively, in the quarter under review.

By Geography: The company reports total salesfrom the Americas, Europe and Asia/Rest of the World. All the regions contributed 38%, 28% and 34% to net sales in the second quarter, respectively. Sales in the Americas, Europe and Asia/Rest of the Worldwent up 29%, 23% and 28%, respectively, on a year-over-year basis.

Operating Results

Gross margin was 58.1%, expanding 50 basis points (bps) year over year.

Research & development (R&D) expenses were $42.6 million, up 36.6% from the year-ago quarter. Selling, general & administrative (SG&A) expenses increased 25.7% year over year to $239.04 million.

As a percentage of sales, R&D expenses expanded 10 bps year over year to 4.6%. SG&A expenses contracted 160 bps year over year to 25.9%.

Adjusted operating margin was 27.6%, which expanded 200 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2021, the company’s cash and cash equivalent balance was $142.3 million, up from $106.6 million as of Mar 31, 2021.

Long-term debt was $1.60 billion at the end of the second quarter, increasing from $1.56 billion at the end of the first quarter.

Mettler-Toledo generated $245.5 million in cash from operating activities in the reported quarter, up from $158.9million in the previous quarter. Free cash flow was $233.3 million in the reported quarter.

Guidance

For third-quarter 2021, Mettler-Toledo anticipates year-over-year sales growth between 11% and 13% in local currency. The Zacks Consensus Estimate for sales is pegged at $880.9 million.

Adjusted third-quarter earnings are anticipated to be $8.12-$8.27 per share, implying a 16-18% rise from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at $7.63per share.

For 2021, the company anticipates year-over-year sales growth of 15%. The Zacks Consensus Estimate for sales is pegged at $3.56 billion.

Mettler-Toledo raised the guidance for adjusted 2021 earnings from $31.45-$31.90 to $32.60-$32.90 per share, suggesting year-over-year growth of 27-28%. The Zacks Consensus Estimate for the same is pegged at $31.90 per share.

Zacks Rank & Stocks to Consider

Currently, Mettler-Toledo has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are NXP Semiconductors (NXPI - Free Report) , Semtech Corporation (SMTC - Free Report) and Agilent Technologies (A - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for NXP, Semtech and Agilent are currently projected at 10%, 12.5% and 13%, respectively.