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Mettler-Toledo (MTD) Up 13.4% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Mettler-Toledo International, Inc. (MTD - Free Report) . Shares have added about 13.4% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Mettler-Toledo  Beats Q1 Earnings & Revenue Estimates

Mettler-Toledo International Inc.’s  first-quarter 2017 results beat the Zacks Consensus Estimate on earnings and revenues. While adjusted earnings per share (EPS) of $3.34 beat the consensus mark by 8.4%, revenues of $594.6 million beat the same by 4.3%.

Revenues

Net revenue was down 16.2% sequentially but up 10.2% on a year-over-year basis. The year-over-year improvement was driven by strengths across all the segments and contribution from the Troemner acquisition. Laboratory, Industrial and Food Retail increased 13%, 12% and 8%, respectively.

Operating Results

Gross margin was 57.7%, down 131 basis points (bps) sequentially but up 210 bps year over year. The year-over-year increase was driven by pricing and productivity gains in plants and Service business. Pro-forma operating margin was 21.4%, up 680 basis points (bps) sequentially and 250 bps year over year.

Non-GAAP net income was $88.9 million or $3.34 per share compared with $67.4 million or $2.46 per share a year ago. GAAP net income was $92.5 million or $3.48 per share compared with $65.7 million or $2.40 per share a year ago.

Balance Sheet and Cash Flow

At the end of the first quarter, cash and cash equivalents balance was $164.9 million compared with $158.7 million in the previous quarter. Long-term debt was $944.2 million compared with $875.1 million in the previous quarter.

The company generated $67.6 million in cash from operating activities and spent $21 million on capex. During the quarter, the company returned nearly $125 million to shareholders by repurchasing shares.

Outlook

For the second quarter of 2017, Mettler-Toledo expects local currency sales to grow approximately 8% to 9%. Adjusted EPS is expected to grow 20% to 21% to $3.85 to $3.90.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Mettler-Toledo's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is solely suitable for growth investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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