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Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2022 adjusted earnings of $9.39 per share, which beat the Zacks Consensus Estimate by 7.6%. The bottom line also improved 16% on a year-over-year basis.
Net sales of $978.4 million were up 6% on a reported basis and 10% on a currency-neutral basis from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $946 million.
Solid momentum across the Laboratory and Industrial segments in the reported quarter drove top-line growth. The strong performance delivered by the company across the Americas and Asia/Rest of the World, especially China, remained a major positive.
Headwinds related to the pandemic, supply-chain disruptions, inflationary pressure, uncertainties due to the Russia-Ukraine war and foreign exchange headwinds remain concerning for the company in the days ahead.
Mettler-Toledo has lost 20.4% on a year-to-date basis compared with the industry’s decline of 16.9%
Nevertheless, portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds.
MettlerToledo International, Inc. Price, Consensus and EPS Surprise
By Segments: The company reports revenues under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 56%, 39% and 5% of net sales in the second quarter, respectively. The Laboratory, Industrial and Food Retail segments witnessed year-over-year improvements of 13%, 9% and 3%, respectively, in the quarter under review.
By Geography: The company reports total sales from the Americas, Europe and Asia/Rest of the World, contributing 40%, 25% and 35% to net sales in the second quarter, respectively. Sales in the Americas, Europe and Asia/Rest of the World went up 12%, 4% and 35%, respectively, on a year-over-year basis.
Operating Results
The gross margin was 58.4%, expanding 30 basis points (bps) year over year.
Research & development (R&D) expenses were $44.02 million, up 3.3% from the year-ago quarter. Selling, general & administrative (SG&A) expenses increased 1.3% year over year to $242.2 million.
As a percentage of sales, R&D expenses contracted 10 bps year over year to 4.5%. SG&A expenses contracted 110 bps year over year to 24.8%.
The adjusted operating margin was 29.2%, which expanded 160 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Mar 31, 2022, the company’s cash and cash equivalent balance was $109.4 million, down from $116.9 million as of Mar 31, 2022.
Long-term debt was $1.82 billion at the end of the second quarter, increasing from $1.77 billion at the end of the first quarter.
Mettler-Toledo generated $219.2 million in cash from operating activities in the reported quarter, up from $90.8 million in the previous quarter. Free cash flow was $208.2 million in the reported quarter.
Guidance
For third-quarter 2022, Mettler-Toledo projects year-over-year sales growth of 8% in local currency. The Zacks Consensus Estimate for sales is pegged at $966.9 million.
Adjusted third-quarter earnings are anticipated to be $9.75-$9.85 per share, implying a 12-13% year-over-year rise, which includes a foreign-currency headwind of 6%. The Zacks Consensus Estimate for earnings is pegged at $9.75 per share.
For 2022, the company hiked its guidance for year-over-year sales growth in local currency from 8% to 9-10%. The Zacks Consensus Estimate for the same is pegged at $3.89 billion.
Mettler-Toledo also revised the guidance for adjusted 2022 earnings from $38.20-$38.50 per share to $38.85-$39.05, suggesting growth of 14-15% from the year-ago reported number. The Zacks Consensus Estimate for the same is pegged at $38.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #4 (Sell).
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Mettler-Toledo (MTD) Q2 Earnings & Sales Beat, Increase Y/Y
Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2022 adjusted earnings of $9.39 per share, which beat the Zacks Consensus Estimate by 7.6%. The bottom line also improved 16% on a year-over-year basis.
Net sales of $978.4 million were up 6% on a reported basis and 10% on a currency-neutral basis from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $946 million.
Solid momentum across the Laboratory and Industrial segments in the reported quarter drove top-line growth. The strong performance delivered by the company across the Americas and Asia/Rest of the World, especially China, remained a major positive.
Headwinds related to the pandemic, supply-chain disruptions, inflationary pressure, uncertainties due to the Russia-Ukraine war and foreign exchange headwinds remain concerning for the company in the days ahead.
Mettler-Toledo has lost 20.4% on a year-to-date basis compared with the industry’s decline of 16.9%
Nevertheless, portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds.
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 revenues under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 56%, 39% and 5% of net sales in the second quarter, respectively. The Laboratory, Industrial and Food Retail segments witnessed year-over-year improvements of 13%, 9% and 3%, respectively, in the quarter under review.
By Geography: The company reports total sales from the Americas, Europe and Asia/Rest of the World, contributing 40%, 25% and 35% to net sales in the second quarter, respectively. Sales in the Americas, Europe and Asia/Rest of the World went up 12%, 4% and 35%, respectively, on a year-over-year basis.
Operating Results
The gross margin was 58.4%, expanding 30 basis points (bps) year over year.
Research & development (R&D) expenses were $44.02 million, up 3.3% from the year-ago quarter. Selling, general & administrative (SG&A) expenses increased 1.3% year over year to $242.2 million.
As a percentage of sales, R&D expenses contracted 10 bps year over year to 4.5%. SG&A expenses contracted 110 bps year over year to 24.8%.
The adjusted operating margin was 29.2%, which expanded 160 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Mar 31, 2022, the company’s cash and cash equivalent balance was $109.4 million, down from $116.9 million as of Mar 31, 2022.
Long-term debt was $1.82 billion at the end of the second quarter, increasing from $1.77 billion at the end of the first quarter.
Mettler-Toledo generated $219.2 million in cash from operating activities in the reported quarter, up from $90.8 million in the previous quarter. Free cash flow was $208.2 million in the reported quarter.
Guidance
For third-quarter 2022, Mettler-Toledo projects year-over-year sales growth of 8% in local currency. The Zacks Consensus Estimate for sales is pegged at $966.9 million.
Adjusted third-quarter earnings are anticipated to be $9.75-$9.85 per share, implying a 12-13% year-over-year rise, which includes a foreign-currency headwind of 6%. The Zacks Consensus Estimate for earnings is pegged at $9.75 per share.
For 2022, the company hiked its guidance for year-over-year sales growth in local currency from 8% to 9-10%. The Zacks Consensus Estimate for the same is pegged at $3.89 billion.
Mettler-Toledo also revised the guidance for adjusted 2022 earnings from $38.20-$38.50 per share to $38.85-$39.05, suggesting growth of 14-15% from the year-ago reported number. The Zacks Consensus Estimate for the same is pegged at $38.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Aspen Technology (AZPN - Free Report) , Keysight Technologies (KEYS - Free Report) and Asure Software (ASUR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Aspen technology has returned 18.9% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 16.3%.
Keysight Technologies has lost 26.8% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.
Asure Software has lost 27.2% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.