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Badger Meter (BMI) Q3 Earnings & Revenues Top Estimates, Up Y/Y

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Badger Meter, Inc (BMI - Free Report) reported earnings of 61 cents per share for third-quarter 2022, beating the Zacks Consensus Estimate of 60 cents. Also, the bottom line compared favorably with the year-ago quarter’s earnings of 54 cents.

Net earnings in the reported quarter were $17.9 million compared with $15.9 million in the year-ago quarter. The year-over-year improvement can be primarily attributed to higher revenues.

Quarterly net sales increased to $148 million from $128.7 million in the year-ago quarter. The 15% (up 17% excluding the unfavorable impact of the stronger US dollar) rise was primarily driven by robust customer demand. Also, the top line beat the consensus mark of $141.1 million.

Following the announcement, shares of the company jumped 3.5% on Oct 19, 2022 and closed the session at $100.36. In the past year, shares have lost 3.5% compared with the Zacks sub-industry’s decline of 23.6%

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Segmental Performance

In the quarter under review, utility water sales rose 17%, owing to strong demand momentum. Strength in E-Series, ultrasonic meters, ORION Cellular endpoint sales, and higher BEACON Software-as-a-Service revenues acted as major tailwinds.

Flow instrumentation sales increased 5% year over year, driven by continued strong order trends across the majority of end-market applications globally. However, it was partly offset by supply chain woes, which impacted manufacturing output.

Other Details

During the September-end quarter, gross profit was $57.5 million, up 12.4% year over year. The gross margin was 38.9%, down from the 39.8% recorded in the prior-year quarter. This downside in the margin was primarily due to rising electronic and other components, logistics and other costs. Operating earnings were $23.9 million or 16.1% of sales compared with $19.4 million and 15.1% in the year-earlier quarter.

Selling, engineering, and administration (SEA) expenses were $33.7 million or 22.7% of sales compared with $31.7 million or 24.7% in the prior-year quarter. The increase in expenses was mainly due to higher personnel costs, research & development, and travel expenses.  However, effective spending controls and higher sales mainly drove the year-over-year improvement in SEA expense leverage.

Cash Flow & Liquidity

During the third quarter of 2022, Badger Meter generated $23.8 million of net cash from operating activities compared with $15.4 million a year ago. As of Sep 30, 2022, the company had $114.8 million of cash and cash equivalents, and $101.9 million of total current liabilities compared with the respective figures of $87.2 million and $82.1 million as of Dec 31, 2021.

Zacks Rank & Stocks to Consider

Badger Meter currently has a Zacks Rank #4 (Sell)

Some better-ranked stocks from the broader technology space are Pure Storage (PSTG - Free Report) , Blackbaud (BLKB - Free Report) and Iridium Communications (IRDM - Free Report) . All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Pure Storage’s 2022 earnings is pegged at $1.18 per share, up 24.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.

Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have gained 4.6% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.55 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 3%.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8.5%. Shares of BLKB have lost 29.5% in the past year.

The Zacks Consensus Estimate for Iridium’s 2022 earnings is pegged at 12 cents per share, up 20% in the past 60 days.  

IRDM’s earnings beat the Zacks Estimate in all the last four quarters, the average being 100%. Shares of IRDM have gained 15.2% in the past year.

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