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Mettler-Toledo International, Inc. (MTD - Free Report) delivered fourth-quarter 2018 adjusted earnings of $6.85 per share, beating the Zacks Consensus Estimate by 11 cents and also came ahead of management’s guided range of $6.72-$6.77 per share. The figure increased 15% on a year-over-year basis and 33.8% sequentially.
Net sales of $817.92 million were up 5.1% year over year and advanced 11.3% from the previous quarter. In local currency, sales grew 8% from the year-ago quarter, exceeding management’s expectation of 6% growth. Further, the figure surpassed the Zacks Consensus Estimate of $807.37 million.
The robust performance of Laboratory and Industrial product lines drove the top line. Further, the company’s solid momentum in China spurred growth.
Coming to the price performance, shares of Mettler-Toledo have returned 7.9% over a year, underperforming the industry’s rally of 10.6%.
Nevertheless, the company remains confident on its growth strategies that include productivity and margin initiatives. Moreover, Mettler-Toledo’s continued investments in product portfolio expansion, field force, Spinnaker sales and marketing programs are expected to continue benefiting its business growth.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail Weighing Solutions.
Laboratory Segment: This segment accounted for 52% of net sales in the reported quarter. The company witnessed 7% sales growth on a year-over-year basis. This can be attributed to robust product offerings which include LabX and One Click product. Moreover, acquisition of Biotix continued to benefit the segment.
Industrial Segment: The company generated 42% of net sales from this segment. Further, sales exhibited year-over-year growth of 10%. This can primarily be attributed to well performing product inspection and core industrial businesses, which exhibited growth of 7% and 13% on a year-over-year basis, respectively.
Food Retail: Mettler-Toledo generated 6% of sales from the food retail business. However, the sales declined 6% from the prior-year quarter in this segment. This was due to nature of the project and customer activity timings.
By Geography: The company reports total sales figure from Americas, Europe and Asia/Rest of the World.
Americas: Mettler-Toledo generated 37% of sales from this region, up 7% year over year. This was driven by robust performance of core industrial and Laboratory businesses of the company.
Europe: This region contributed 32% to the net sales of the company in the reported quarter. Sales in this region grew 6% year over year which can be attributed to strong performance of core industrial and product inspection businesses. Further, robust Laboratory product lines contributed well.
Asia/Rest of the World: The company generated 31% of sales from this region, reflecting growth of 10% on a year-over-year basis. This was primarily driven by strong performance of the company in China, where sales grew 12% from the year-ago quarter. Further, strong Laboratory and Industrial product lines drove sales.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
Gross margin was 58.4%, contracting 20 basis points (bps) year over year. This was primarily due to tariff mix, and costs related to new product introduction and product inspection business.
Research & development (R&D) expenses were $36.2 million, up 12% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 2.4% year over year to $201.6 million.
Adjusted operating margin was 29.3%, expanding 140 bps from the prior-year quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2018, the company’s cash and cash equivalents balance was $178.1 million, up from $137.4 million as of Sep 30, 2018.
Long-term debt was $985.02 million, decreasing from $988.9 millionin the previous quarter.
Mettler-Toledo generated $198.6 million of cash from operating activities, up from $149.7million in the prior quarter. Free cash flow was $157.2 million compared with $121.3 million in the third quarter.
Guidance
For first-quarter 2019, Mettler-Toledo expects sales growth of 5.5% in local currency. The Zacks Consensus Estimate for sales is pegged at $676.62 million.
Adjusted earnings are anticipated in the range of $4-$4.05 per share, reflecting year-over-year growth of 7-8%. The Zacks Consensus Estimate for earnings is pegged at $3.98 per share.
For 2019, the company expects sales to grow 5% in local currency. The Zacks Consensus Estimate is pegged at $3.03 billion.
Adjusted earnings are expected to be in the range of $22.5-$22.7 per share. The Zacks Consensus Estimate is pegged at $22.49 per share.
Long-term earnings growth rate for TripAdvisor, Upland Software and Wayfair is currently pegged at 14.05%, 20% and 18%, respectively.
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Mettler-Toledo (MTD) Q4 Earnings & Revenues Beat Estimates
Mettler-Toledo International, Inc. (MTD - Free Report) delivered fourth-quarter 2018 adjusted earnings of $6.85 per share, beating the Zacks Consensus Estimate by 11 cents and also came ahead of management’s guided range of $6.72-$6.77 per share. The figure increased 15% on a year-over-year basis and 33.8% sequentially.
Net sales of $817.92 million were up 5.1% year over year and advanced 11.3% from the previous quarter. In local currency, sales grew 8% from the year-ago quarter, exceeding management’s expectation of 6% growth. Further, the figure surpassed the Zacks Consensus Estimate of $807.37 million.
The robust performance of Laboratory and Industrial product lines drove the top line. Further, the company’s solid momentum in China spurred growth.
Coming to the price performance, shares of Mettler-Toledo have returned 7.9% over a year, underperforming the industry’s rally of 10.6%.
Nevertheless, the company remains confident on its growth strategies that include productivity and margin initiatives. Moreover, Mettler-Toledo’s continued investments in product portfolio expansion, field force, Spinnaker sales and marketing programs are expected to continue benefiting its business growth.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail Weighing Solutions.
Laboratory Segment: This segment accounted for 52% of net sales in the reported quarter. The company witnessed 7% sales growth on a year-over-year basis. This can be attributed to robust product offerings which include LabX and One Click product. Moreover, acquisition of Biotix continued to benefit the segment.
Industrial Segment: The company generated 42% of net sales from this segment. Further, sales exhibited year-over-year growth of 10%. This can primarily be attributed to well performing product inspection and core industrial businesses, which exhibited growth of 7% and 13% on a year-over-year basis, respectively.
Food Retail: Mettler-Toledo generated 6% of sales from the food retail business. However, the sales declined 6% from the prior-year quarter in this segment. This was due to nature of the project and customer activity timings.
By Geography: The company reports total sales figure from Americas, Europe and Asia/Rest of the World.
Americas: Mettler-Toledo generated 37% of sales from this region, up 7% year over year. This was driven by robust performance of core industrial and Laboratory businesses of the company.
Europe: This region contributed 32% to the net sales of the company in the reported quarter. Sales in this region grew 6% year over year which can be attributed to strong performance of core industrial and product inspection businesses. Further, robust Laboratory product lines contributed well.
Asia/Rest of the World: The company generated 31% of sales from this region, reflecting growth of 10% on a year-over-year basis. This was primarily driven by strong performance of the company in China, where sales grew 12% from the year-ago quarter. Further, strong Laboratory and Industrial product lines drove sales.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise | Mettler-Toledo International, Inc. Quote
Operating Results
Gross margin was 58.4%, contracting 20 basis points (bps) year over year. This was primarily due to tariff mix, and costs related to new product introduction and product inspection business.
Research & development (R&D) expenses were $36.2 million, up 12% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 2.4% year over year to $201.6 million.
Adjusted operating margin was 29.3%, expanding 140 bps from the prior-year quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2018, the company’s cash and cash equivalents balance was $178.1 million, up from $137.4 million as of Sep 30, 2018.
Long-term debt was $985.02 million, decreasing from $988.9 millionin the previous quarter.
Mettler-Toledo generated $198.6 million of cash from operating activities, up from $149.7million in the prior quarter. Free cash flow was $157.2 million compared with $121.3 million in the third quarter.
Guidance
For first-quarter 2019, Mettler-Toledo expects sales growth of 5.5% in local currency. The Zacks Consensus Estimate for sales is pegged at $676.62 million.
Adjusted earnings are anticipated in the range of $4-$4.05 per share, reflecting year-over-year growth of 7-8%. The Zacks Consensus Estimate for earnings is pegged at $3.98 per share.
For 2019, the company expects sales to grow 5% in local currency. The Zacks Consensus Estimate is pegged at $3.03 billion.
Adjusted earnings are expected to be in the range of $22.5-$22.7 per share. The Zacks Consensus Estimate is pegged at $22.49 per share.
Zacks Rank and Stocks to Consider
Mettler-Toledo carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are TripAdvisor (TRIP - Free Report) , Upland Software (UPLD - Free Report) and Wayfair (W - Free Report) . While TripAdvisor sports a Zacks Rank #1 (Strong Buy), Upland Software and Wayfair carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for TripAdvisor, Upland Software and Wayfair is currently pegged at 14.05%, 20% and 18%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>