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Badger Meter (BMI) Up 7.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Badger Meter (BMI - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Badger Meter due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Badger Meter Surpasses Q3 Earnings and Revenue Estimates
Badger Meter reported healthy third-quarter 2018 results, wherein both the top line and the bottom line surpassed the respective Zacks Consensus Estimate. The company delivered record net sales for the third quarter and all-time record adjusted earnings per share, driven by higher domestic municipal sales of its flagship products and increased international sales, notably in the Middle East.
Net Earnings
On a GAAP basis, net earnings for the third quarter was $2.9 million or 10 cents per share compared with $8 million or 27 cents per share in the year-ago quarter. The year-over-year decrease was primarily due to higher pension and post-retirement costs.
Adjusted net earnings increased 69.3% year over year to $13.5 million or 46 cents per share, achieving all-time record tally. The bottom line beat the Zacks Consensus Estimate by 5 cents.
Revenues
Quarterly net sales increased 10.6% year over year, reflecting record net sales for a third quarter, to $110.6 million driven by high domestic municipal sales of flagship products, favorable sales mix and international sales momentum, notably in the Middle East. The top line surpassed the Zacks Consensus Estimate of $109 million.
Other Quarter Details
Cost of sales rose 5.9% year over year to $66.7 million. Gross profit came in at $43.9 million, up 18.6% from $37 million in the year-earlier quarter. Selling, engineering and administration expenses were up 14.1% to $28.2 million from $24.7 million in the prior-year quarter, primarily due to executive retirement charges, higher incentive compensation and investments in research and development. Operating earnings improved 27.8% to $15.7 million from $12.3 million recorded a year ago on the back of top-line growth.
Liquidity
As of Sep 30, 2018, Badger Meter had a cash balance of $10.6 million and short-term current debt of $36 million.
Outlook
Management remains optimistic about the remainder of 2018 and into 2019 supported by a number of reasons like a solid backlog, continued customer acceptance of its new products and the moderating of copper prices. The company continues to make progress in its various innovative technologies, including D-Flow ultrasonic technology. Furthermore, inclusion in AT&T’s Smart City Alliance will allow Badger Meter to explore new ways for its smart water solutions to join forces with industry-leading cellular networks. The company focuses on enhancing shareholders’ value through organic and inorganic investments supported by its strong balance sheet.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 5.16% due to these changes.
VGM Scores
Currently, Badger Meter has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
Outlook
Badger Meter has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Badger Meter (BMI) Up 7.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Badger Meter (BMI - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Badger Meter due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Badger Meter Surpasses Q3 Earnings and Revenue Estimates
Badger Meter reported healthy third-quarter 2018 results, wherein both the top line and the bottom line surpassed the respective Zacks Consensus Estimate. The company delivered record net sales for the third quarter and all-time record adjusted earnings per share, driven by higher domestic municipal sales of its flagship products and increased international sales, notably in the Middle East.
Net Earnings
On a GAAP basis, net earnings for the third quarter was $2.9 million or 10 cents per share compared with $8 million or 27 cents per share in the year-ago quarter. The year-over-year decrease was primarily due to higher pension and post-retirement costs.
Adjusted net earnings increased 69.3% year over year to $13.5 million or 46 cents per share, achieving all-time record tally. The bottom line beat the Zacks Consensus Estimate by 5 cents.
Revenues
Quarterly net sales increased 10.6% year over year, reflecting record net sales for a third quarter, to $110.6 million driven by high domestic municipal sales of flagship products, favorable sales mix and international sales momentum, notably in the Middle East. The top line surpassed the Zacks Consensus Estimate of $109 million.
Other Quarter Details
Cost of sales rose 5.9% year over year to $66.7 million. Gross profit came in at $43.9 million, up 18.6% from $37 million in the year-earlier quarter. Selling, engineering and administration expenses were up 14.1% to $28.2 million from $24.7 million in the prior-year quarter, primarily due to executive retirement charges, higher incentive compensation and investments in research and development. Operating earnings improved 27.8% to $15.7 million from $12.3 million recorded a year ago on the back of top-line growth.
Liquidity
As of Sep 30, 2018, Badger Meter had a cash balance of $10.6 million and short-term current debt of $36 million.
Outlook
Management remains optimistic about the remainder of 2018 and into 2019 supported by a number of reasons like a solid backlog, continued customer acceptance of its new products and the moderating of copper prices. The company continues to make progress in its various innovative technologies, including D-Flow ultrasonic technology. Furthermore, inclusion in AT&T’s Smart City Alliance will allow Badger Meter to explore new ways for its smart water solutions to join forces with industry-leading cellular networks. The company focuses on enhancing shareholders’ value through organic and inorganic investments supported by its strong balance sheet.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 5.16% due to these changes.
VGM Scores
Currently, Badger Meter has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
Outlook
Badger Meter has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.