Mettler-Toledo International, Inc. (MTD - Free Report) delivered second-quarter 2018 adjusted earnings of $5.16 per share, beating the Zacks Consensus Estimate by 7 cents and also came ahead of management’s guided range of $5.05-$5.10 per share. The figure improved 11% on a year-over-year basis and 25.8% sequentially.
Net sales of $731.4 million were up 1.3% year over year and 7.6% from the previous quarter. In local currency, sales grew 5% from the year-ago quarter. However, the figure was below management’s growth expectation of 5.5%.
The robust performance of Laboratory and Industrial product lines drove the top line. Further, the company’s solid momentum across Americas and Asia aided growth.
However, the top line missed the Zacks Consensus Estimate of $736.34 million.
Foreign exchange headwinds had an impact of 4% on the top line during the reported quarter. Further, the company’s weak performance in Europe remained an overhang.
Nevertheless, the company remains confident on 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 aiding business growth.
Coming to the price performance, shares of Mettler-Toledo have gained 30.7% on a year-to-date basis, outperforming the industry’s rally of 21.8%.
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 sales growth of 8% in local currency on a year-over-year basis. This can be attributed to strong investments in Spinnaker sales, marketing initiatives, field resources and R&D.
Industrial Segment: The company generated 41% of net sales from this segment. Further, sales exhibited year-over-year growth of 3%. This can primarily be attributed to well performing core industrial business, which improved 5% year over year. However, the segment witnessed sluggish product inspection business, which was down 1% from the year-ago quarter.
Food Retail: Mettler-Toledo generated 7% of sales from the food retail business. However, the sales declined 8% from the prior-year quarter owing to tough market conditions and timing of customer project activity.
The company reports total sales figure from Americas, Europe and Asia/Rest of the World.
Americas: Mettler-Toledo generated 40% of sales from this region, up 7% in local currency year over year. This was driven by well-performing industrial business, especially core industrial business. Further, robust Laboratory segment contributed to the first-quarter results. However, food retail business underperformed in this region excluding which sales would have exhibited year-over-year growth of 9%.
Europe: This region contributed 28% to the net sales of the company in the reported quarter. Sales in this region fell 1% year over year on account of sluggish performance of product inspection business excluding which sales would have improved 3% year over year. Further, softness in retail business was a headwind. These effects offset the strong performance of laboratory and core industrial businesses in this region.
Asia/Rest of the World: The company generated sales of 32% from this region, reflecting growth of 7% on a year-over-year basis. This can primarily be attributed to strong performance of the company in China where sales grew 9% from the year-ago quarter. The company experience strong momentum across all the businesses in this region during the reported quarter.