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Roper (ROP) Beats on Q3 Earnings, Improves 2022 Outlook
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Roper Technologies’ (ROP - Free Report) third-quarter 2022 adjusted earnings (excluding $1.08 from non-recurring items) of $3.95 per share surpassed the Zacks Consensus Estimate of $3.67. However, on a year-over-year basis, earnings declined 6.1%.
Roper’s net revenues of $1,350.3 million beat the Zacks Consensus Estimate of $1,328 million. The top line increased 9.6% year over year. Organic sales in the quarter increased 10%, owing to strength across each of the three segments. Acquisitions/divestitures boosted sales by 1%. However, movement in foreign currency translation had an adverse impact of 2%.
Segmental Performance
Roper has divested its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. Beginning second-quarter 2022, the company started reporting under three segments namely — Application Software, Network Software and Technology Enabled Products.
Application Software’s revenues totaled $644.0 million, representing 47.7% of the quarter’s top line. On a year-over-year basis, the segment’s revenues increased 7%. Organic sales in the quarter increased 7%.
Network Software & Systems generated revenues of $346.6 million, accounting for 25.7% of third-quarter revenues. Segmental revenues grew 10% year over year. Organic sales in the quarter increased 10%.
Technology Enabled Products generated revenues of $359.7 million, accounting for 26.6% of the quarter’s revenues. Sales were up 14% year over year. Organic sales in the quarter grew 15%.
In the reported quarter, Roper’s cost of sales increased 13.3% year over year to $408.5 million. Cost of sales was 30.3% of the quarter’s net sales. Gross profit in the quarter grew 8% to $941.8 million, while gross margin decreased to 69.7% from 70.7% in the year-ago quarter.
Selling, general and administrative expenses increased 4.5% to $548.6 million. The same represented 40.6% of net sales in the reported quarter. Adjusted EBITDA was $555 million, reflecting year-over-year growth of 11.7%. The margin increased 80 basis points to 41.1%. Interest expenses fell 29% year over year to $41.3 million.
Balance Sheet & Cash Flow
Exiting third-quarter 2022, Roper had cash and cash equivalents of $1,894.5 million compared with $351.5 million at the end of December 2021. Long-term debt (net of current portion) decreased to $5,960.6 million from $7,122.6 million at the end of the year-ago period. In the first nine months of 2022, ROP’s repayment under the revolving line of credit was $470.0 million.
Roper generated net cash of $662.9 million from operating activities in the first nine months of 2022, reflecting a decline of 53.7% from the year-ago level. Capital expenditure totaled $30 million, compared with $19.9 million in the year-ago quarter.
In the first nine months of 2022, ROP rewarded its shareholders with a dividend payment of $196.2 million, up 10.9% year over year.
Improved Outlook
Roper has improved its full-year outlook owing to strong third-quarter performance and expectations of continued strength in its business. For 2022, ROP predicts adjusted earnings per share from continuing operations of $14.09-$14.13 (previous view: $13.46-$13.62). Organic growth from continuing operations is expected to be 9% in 2022.
For the fourth quarter, Roper anticipates earnings per share of $3.72-$3.76.
Zacks Rank & Stocks to Consider
ROP currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 27.1% in the past three months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 29.3% in the past three months.
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Roper (ROP) Beats on Q3 Earnings, Improves 2022 Outlook
Roper Technologies’ (ROP - Free Report) third-quarter 2022 adjusted earnings (excluding $1.08 from non-recurring items) of $3.95 per share surpassed the Zacks Consensus Estimate of $3.67. However, on a year-over-year basis, earnings declined 6.1%.
Roper’s net revenues of $1,350.3 million beat the Zacks Consensus Estimate of $1,328 million. The top line increased 9.6% year over year. Organic sales in the quarter increased 10%, owing to strength across each of the three segments. Acquisitions/divestitures boosted sales by 1%. However, movement in foreign currency translation had an adverse impact of 2%.
Segmental Performance
Roper has divested its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. Beginning second-quarter 2022, the company started reporting under three segments namely — Application Software, Network Software and Technology Enabled Products.
Application Software’s revenues totaled $644.0 million, representing 47.7% of the quarter’s top line. On a year-over-year basis, the segment’s revenues increased 7%. Organic sales in the quarter increased 7%.
Network Software & Systems generated revenues of $346.6 million, accounting for 25.7% of third-quarter revenues. Segmental revenues grew 10% year over year. Organic sales in the quarter increased 10%.
Technology Enabled Products generated revenues of $359.7 million, accounting for 26.6% of the quarter’s revenues. Sales were up 14% year over year. Organic sales in the quarter grew 15%.
Roper Technologies, Inc. Price and Consensus
Roper Technologies, Inc. price-consensus-chart | Roper Technologies, Inc. Quote
Margin Profile
In the reported quarter, Roper’s cost of sales increased 13.3% year over year to $408.5 million. Cost of sales was 30.3% of the quarter’s net sales. Gross profit in the quarter grew 8% to $941.8 million, while gross margin decreased to 69.7% from 70.7% in the year-ago quarter.
Selling, general and administrative expenses increased 4.5% to $548.6 million. The same represented 40.6% of net sales in the reported quarter. Adjusted EBITDA was $555 million, reflecting year-over-year growth of 11.7%. The margin increased 80 basis points to 41.1%. Interest expenses fell 29% year over year to $41.3 million.
Balance Sheet & Cash Flow
Exiting third-quarter 2022, Roper had cash and cash equivalents of $1,894.5 million compared with $351.5 million at the end of December 2021. Long-term debt (net of current portion) decreased to $5,960.6 million from $7,122.6 million at the end of the year-ago period. In the first nine months of 2022, ROP’s repayment under the revolving line of credit was $470.0 million.
Roper generated net cash of $662.9 million from operating activities in the first nine months of 2022, reflecting a decline of 53.7% from the year-ago level. Capital expenditure totaled $30 million, compared with $19.9 million in the year-ago quarter.
In the first nine months of 2022, ROP rewarded its shareholders with a dividend payment of $196.2 million, up 10.9% year over year.
Improved Outlook
Roper has improved its full-year outlook owing to strong third-quarter performance and expectations of continued strength in its business. For 2022, ROP predicts adjusted earnings per share from continuing operations of $14.09-$14.13 (previous view: $13.46-$13.62). Organic growth from continuing operations is expected to be 9% in 2022.
For the fourth quarter, Roper anticipates earnings per share of $3.72-$3.76.
Zacks Rank & Stocks to Consider
ROP currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered a four-quarter earnings surprise of 3.4%, on average. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 27.1% in the past three months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 29.3% in the past three months.