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Roper's (ROP) Q4 Earnings and Revenues Surpass Estimates

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Roper Technologies, Inc. (ROP - Free Report) has reported better-than-expected fourth-quarter 2021 results, with earnings and sales surpassing estimates by 1.9% and 0.7%, respectively.

The company’s adjusted earnings in the fourth quarter were $3.73 per share, surpassing the Zacks Consensus Estimate of $3.66. On a year-over-year basis, earnings expanded 14.1% from $3.27 on the back of healthy sales generation, partially offset by higher costs and expenses.

In 2021, the company’s adjusted earnings came in at $14.18, an increase of 23% on a year-over-year basis.

Revenue Details

In the reported quarter, Roper’s net revenues amounted to $1,512.3 million, up 13.2% year over year. Adjusted revenues increased 13% year over year to $1,512 million. Organic sales in the quarter increased 13%, while acquisitions/divestitures and foreign currency translation did not have any material impacts.

Roper’s top line beat the Zacks Consensus Estimate of $1,502 million.

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

Application Software’s revenues totaled $609 million, representing 40.3% of the quarter’s top line. On a year-over-year basis, the segment’s revenues expanded 10%. Organic sales in the quarter increased 10%.

Network Software & Systems generated revenues of $355.1 million, accounting for 23.5% of fourth-quarter revenues. The top line grew 14.6% year over year. Organic sales in the quarter increased 14%.

Measurement & Analytical Solutions generated revenues of $412.8 million, accounting for 27.3% of the quarter’s revenues. Sales increased 15% year over year. Organic sales in the quarter increased 15%.

Process Technologies generated revenues of $135.4 million, accounting for 8.9% of the quarter’s revenues. Sales were up 16% year over year. Organic sales in the quarter grew 17%.

In 2021, the company’s net revenues came in at $5,777.8 million, up 19% year over year.

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

Margin Profile

In the reported quarter, Roper’s cost of sales increased 13.7% year over year to $494.3 million. Cost of sales was 32.7% of the quarter’s net sales. Gross profit in the quarter grew 13% to $1,018 million, while gross margin decreased 20 basis points (bps) year over year to 67.3%.

Selling, general and administrative expenses increased 7.2% to $597.9 million. It represented 39.5% of net sales in the reported quarter. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $576 million, reflecting year-over-year growth of 12%. Margin decreased 10 bps to 38.1%. Interest expenses fell 12.2% year over year to $55.9 million.

Balance Sheet & Cash Flow

Exiting 2021, Roper had cash and cash equivalents of $351.5 million, down from $352.5 million recorded in the last reported quarter. Long-term debt decreased 5.4% sequentially to $7,122.6 million.

In 2021, the company’s repayment under the revolving line of credit was $1,150 million.

The company generated net cash of $1,866.2 million from operating activities in 2021, reflecting an increase of 36.4% from a year ago. Capital expenditure totaled $32.9 million compared with $28.3 million in 2020.

The company rewarded shareholders with a dividend payout of $236.4 million in 2021. The amount represents growth from $214.1 million distributed in the previous year.

Important Event

In the fourth quarter, Roper divested its Zetec and CIVCO Radiotherapy businesses. The company also expects the divestment of its TransCore to be completed in first-quarter 2022, subject to certain customary conditions.

Outlook

For 2022, Roper predicts earnings from continuing operations of $15.25-$15.55 per share, higher than $14.18 in 2021. For the year, organic sales are expected to increase in the range of 6-8% year over year.

For the first quarter of 2022, the company’s earnings from continuing operations are expected to be $3.63-$3.67.

Zacks Rank & Stocks to Consider

ROP currently carries a Zacks Rank #4 (Sell).

Some better-ranked companies in the industry are discussed below.

Ferguson plc (FERG - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Its earnings surprise in the last reported quarter was 16.82%, on average.

Ferguson’s earnings estimates increased 0.1% for fiscal 2022 (ending July 2022) and 0.6% for fiscal 2023 (ending July 2023) in the past 30 days. Its shares have gained 3.8% in the past three months.

Graco Inc. (GGG - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 2.46%, on average.

In the past 30 days, Graco’s earnings estimates have been stable for 2022 and decreased 1.3% 2022. GGG’s shares have lost 3.4% in the past three months.

Xometry, Inc. (XMTR - Free Report) presently carries a Zacks Rank #2. In the last reported quarter, its earnings missed the consensus estimate by 6.45%.

Xometry’s bottom line estimates have increased 2.2% for 2021 (results awaited) and decreased 52.2% for 2022 in the past 30 days. Its shares have lost 12.7% in the past three months.


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