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IDEX (IEX) Lags on Q4 Earnings, Projects Y/Y Growth for 2022
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IDEX Corporation (IEX - Free Report) reported mixed fourth-quarter 2021 results. The company’s earnings lagged the Zacks Consensus Estimate by 2.52%, whereas sales surpassed the same by 1.26%.
In the reported quarter, the company’s adjusted earnings were $1.55 per share, lagging the Zacks Consensus Estimate of $1.59. On a year-over-year basis, the bottom line increased 13.1% from the year-ago quarter’s figure of $1.37. Healthy segmental results favorably impacted the quarter’s earnings.
In 2021, the company’s adjusted earnings were $6.30 per share, increasing from the previous year’s $5.19. However, the bottom line lagged the Zacks Consensus estimate of $6.34.
Earnings for the fourth quarter and 2021 were at the low-end of the company’s projections of $1.55-$1.58 and $6.30-$6.33, respectively.
Revenue Details
In the quarter under review, the company’s net sales were $714.8 million, reflecting year-over-year growth of 16.3%. Organic sales in the quarter increased 11% year over year, higher than 9-10% growth expected by the company. Acquired assets boosted sales by 5%.
The company’s top line surpassed the Zacks Consensus Estimate of $705.9 million.
It reports net sales under three business segments, results of which are discussed below:
Revenues from Fluid & Metering Technologies totaled $252.8 million, increasing 10.1% year over year. Organic sales were up 7% and synergies from acquired assets added 4%. Foreign-currency translation left a negative impact of 1%.
Revenues from Health & Science Technologies totaled $294.1 million, reflecting year-over-year growth of 24.7%. Organic sales in the quarter increased 16% year over year, while acquisitions/divestitures boosted sales by 9%.
Revenues from Fire & Safety/Diversified Products totaled $168.5 million, rising 11.9% year over year. The results were positively impacted by a 13% increase in organic sales and suffered 1% from forex woes.
In 2021, the company’s revenues totaled $2.76 billion, reflecting an increase of 17.6% from the previous year. However, the top line was in line with the Zacks Consensus Estimate of $2.75 billion.
Margin Profile
In the quarter under review, IDEX’s cost of sales increased 15.9% year over year to $400.6 million. The adjusted gross profit was $314.2 million, up 16.8% year over year, while the adjusted gross margin increased 20 basis points (bps) to 44%.
Selling, general and administrative expenses increased 21.1% year over year to $151.5 million. It represented 21.2% of revenues. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter under review increased 15.1% year over year to $192.4 million. Also, the adjusted EBITDA margin decreased 30 bps year over year to 26.9%.
The adjusted operating income was $162.7 million, up 13% year over year, whereas the margin was 22.8%, down 60 bps. Interest expenses in the quarter dipped 11.9% year over year to $9.6 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, IDEX’s cash and cash equivalents increased 6.1% sequentially to $855.4 million. Long-term debt was $1,190.3 million, flat from the previous quarter.
In 2021, the company raised $499.4 million from 3.00% senior notes issued and made payments of $350.1 million for 4.20% senior notes.
In 2021, IDEX generated net cash of $565.3 million from operating activities, decreasing 0.7% from the previous year. Capital used for purchasing property, plant and equipment was $72.7 million versus $51.6 million in 2020. Free cash flow was $492.6 million, down 4.8% year over year.
The company paid out dividends totaling $161.1 million and refrained from repurchasing any shares. Notably, it distributed $151.8 million as dividends and bought back shares worth $110.3 million in 2020.
Amount spent on acquisitions, net of acquired cash, totaled $577.4 million. In the fourth quarter, IDEX entered a deal to buy Nexsight, LLC, and its WinCan, Envirosight, MyTana and Pipeline Renewal Technologies businesses. The deal is valued at $120 million in cash. The acquisition is expected to be complete in first-quarter 2022. (For more information, please read: IDEX Enters Into Deal to Acquire Nexsight for $120M)
Outlook
IDEX anticipates the demand for technologies to be strong for the Health & Science Technologies segment. The pandemic-related woes and supply-chain issues are predicted to persist in the first half of 2022.
For first-quarter 2022, IDEX anticipates adjusted earnings of $1.73-$1.76 per share and year-over-year growth in organic sales of 6-7%.
For 2022, the company anticipates adjusted earnings of $7.33-$7.63 per share. Organic sales are predicted to grow 5-8%.
IDEX Corporation Price, Consensus and EPS Surprise
The company reported better-than-expected results in the last four quarters, with an average earnings surprise of 20.07%. In the past 60 days, the Zacks Consensus Estimate for Xylem’s fourth-quarter earnings has been revised down 1.6%.
Colfax Corporation is slated to release fourth-quarter results on Feb 22, before market open. It presently carries a Zacks Rank #4 (Sell).
In the last four quarters, the company recorded better-than-expected results thrice and in-line results once. It pulled off a trailing four-quarter earnings surprise of 5.64%, on average. The Zacks Consensus Estimate for CFX’s fourth-quarter earnings has been increased by 1.8% in the past 60 days.
Illinois Tool Works Inc. (ITW - Free Report) presently carries a Zacks Rank #3. The company is slated to report fourth-quarter 2021 results on Feb 3, before market open.
The company reported better-than-expected results in three of the last four quarters and lagged in one. The earnings beat for the quarters is 7.68%, on average. The Zacks Consensus Estimate for ITW’s fourth-quarter earnings has increased 0.5% in the past 60 days.
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IDEX (IEX) Lags on Q4 Earnings, Projects Y/Y Growth for 2022
IDEX Corporation (IEX - Free Report) reported mixed fourth-quarter 2021 results. The company’s earnings lagged the Zacks Consensus Estimate by 2.52%, whereas sales surpassed the same by 1.26%.
In the reported quarter, the company’s adjusted earnings were $1.55 per share, lagging the Zacks Consensus Estimate of $1.59. On a year-over-year basis, the bottom line increased 13.1% from the year-ago quarter’s figure of $1.37. Healthy segmental results favorably impacted the quarter’s earnings.
In 2021, the company’s adjusted earnings were $6.30 per share, increasing from the previous year’s $5.19. However, the bottom line lagged the Zacks Consensus estimate of $6.34.
Earnings for the fourth quarter and 2021 were at the low-end of the company’s projections of $1.55-$1.58 and $6.30-$6.33, respectively.
Revenue Details
In the quarter under review, the company’s net sales were $714.8 million, reflecting year-over-year growth of 16.3%. Organic sales in the quarter increased 11% year over year, higher than 9-10% growth expected by the company. Acquired assets boosted sales by 5%.
The company’s top line surpassed the Zacks Consensus Estimate of $705.9 million.
It reports net sales under three business segments, results of which are discussed below:
Revenues from Fluid & Metering Technologies totaled $252.8 million, increasing 10.1% year over year. Organic sales were up 7% and synergies from acquired assets added 4%. Foreign-currency translation left a negative impact of 1%.
Revenues from Health & Science Technologies totaled $294.1 million, reflecting year-over-year growth of 24.7%. Organic sales in the quarter increased 16% year over year, while acquisitions/divestitures boosted sales by 9%.
Revenues from Fire & Safety/Diversified Products totaled $168.5 million, rising 11.9% year over year. The results were positively impacted by a 13% increase in organic sales and suffered 1% from forex woes.
In 2021, the company’s revenues totaled $2.76 billion, reflecting an increase of 17.6% from the previous year. However, the top line was in line with the Zacks Consensus Estimate of $2.75 billion.
Margin Profile
In the quarter under review, IDEX’s cost of sales increased 15.9% year over year to $400.6 million. The adjusted gross profit was $314.2 million, up 16.8% year over year, while the adjusted gross margin increased 20 basis points (bps) to 44%.
Selling, general and administrative expenses increased 21.1% year over year to $151.5 million. It represented 21.2% of revenues. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter under review increased 15.1% year over year to $192.4 million. Also, the adjusted EBITDA margin decreased 30 bps year over year to 26.9%.
The adjusted operating income was $162.7 million, up 13% year over year, whereas the margin was 22.8%, down 60 bps. Interest expenses in the quarter dipped 11.9% year over year to $9.6 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, IDEX’s cash and cash equivalents increased 6.1% sequentially to $855.4 million. Long-term debt was $1,190.3 million, flat from the previous quarter.
In 2021, the company raised $499.4 million from 3.00% senior notes issued and made payments of $350.1 million for 4.20% senior notes.
In 2021, IDEX generated net cash of $565.3 million from operating activities, decreasing 0.7% from the previous year. Capital used for purchasing property, plant and equipment was $72.7 million versus $51.6 million in 2020. Free cash flow was $492.6 million, down 4.8% year over year.
The company paid out dividends totaling $161.1 million and refrained from repurchasing any shares. Notably, it distributed $151.8 million as dividends and bought back shares worth $110.3 million in 2020.
Amount spent on acquisitions, net of acquired cash, totaled $577.4 million. In the fourth quarter, IDEX entered a deal to buy Nexsight, LLC, and its WinCan, Envirosight, MyTana and Pipeline Renewal Technologies businesses. The deal is valued at $120 million in cash. The acquisition is expected to be complete in first-quarter 2022. (For more information, please read: IDEX Enters Into Deal to Acquire Nexsight for $120M)
Outlook
IDEX anticipates the demand for technologies to be strong for the Health & Science Technologies segment. The pandemic-related woes and supply-chain issues are predicted to persist in the first half of 2022.
For first-quarter 2022, IDEX anticipates adjusted earnings of $1.73-$1.76 per share and year-over-year growth in organic sales of 6-7%.
For 2022, the company anticipates adjusted earnings of $7.33-$7.63 per share. Organic sales are predicted to grow 5-8%.
IDEX Corporation Price, Consensus and EPS Surprise
IDEX Corporation price-consensus-eps-surprise-chart | IDEX Corporation Quote
Zacks Rank & Other Important Earnings Releases
With a market capitalization of $16.1 billion, IDEX currently carries a Zacks Rank #3 (Hold).
Three other companies from the industry to soon report results are discussed below:
Xylem Inc. (XYL - Free Report) will release fourth-quarter results on Feb 3, before market open. It presently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company reported better-than-expected results in the last four quarters, with an average earnings surprise of 20.07%. In the past 60 days, the Zacks Consensus Estimate for Xylem’s fourth-quarter earnings has been revised down 1.6%.
Colfax Corporation is slated to release fourth-quarter results on Feb 22, before market open. It presently carries a Zacks Rank #4 (Sell).
In the last four quarters, the company recorded better-than-expected results thrice and in-line results once. It pulled off a trailing four-quarter earnings surprise of 5.64%, on average. The Zacks Consensus Estimate for CFX’s fourth-quarter earnings has been increased by 1.8% in the past 60 days.
Illinois Tool Works Inc. (ITW - Free Report) presently carries a Zacks Rank #3. The company is slated to report fourth-quarter 2021 results on Feb 3, before market open.
The company reported better-than-expected results in three of the last four quarters and lagged in one. The earnings beat for the quarters is 7.68%, on average. The Zacks Consensus Estimate for ITW’s fourth-quarter earnings has increased 0.5% in the past 60 days.