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Roper's (ROP) Q4 Earnings Surpass Estimates, Revenues Miss
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Roper Technologies, Inc. (ROP - Free Report) delivered fourth-quarter 2019 positive earnings surprise of 1.5%.
Adjusted earnings were $3.39 per share, surpassing the Zacks Consensus Estimate of $3.34. Also, the bottom line increased 5.3% from the year-ago quarter number of $3.22 backed by solid revenue growth.
In 2019, the company’s adjusted earnings were $13.05 per share, increasing 10% from the year-ago figure of $11.81.
Inside the Headlines
Roper’s net revenues were $1,394.8 million, up 1.3% year over year. Notably, adjusted revenues totaled $1,400 million, up 2% year over year. The rise was primarily driven by 1% organic growth and 1% gain from acquired assets. However, the top line missed the Zacks Consensus Estimate of $1,419 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:
Application Software’s revenues totaled $410.8 million, representing 29.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 4.7%.
Network Software & Systems generated revenues of $425.8 million, accounting for roughly 30.5% of fourth-quarter revenues. Sales grew 19.8% year over year.
Measurement & Analytical Solutions generated revenues of $387.9 million, accounting for roughly 27.8% of the quarter’s top line. Sales declined 13.1% year over year.
Process Technologies generated revenues of $170.3 million, accounting for roughly 12.1% of the quarter’s revenues. Sales edged down 6.5% year over year.
Margin Details
In the October-December quarter, Roper’s cost of sales decreased 0.3% year over year to $501.9 million. Cost of sales was 35.9% of the quarter’s revenues compared with 36.6% a year ago. Adjusted gross profit increased 3% to $898 million, with margin of 64.1% reflecting expansion of 60 basis points (bps).
Selling, general and administrative expenses fell 2.8% to $494.5 million. It represented 35.3% of total revenues compared with 36.9% in the year-ago quarter. Operating profit improved 0.2% to $440.7 million with margin of 31.6%, down 40 bps year over year.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Roper had cash and cash equivalents of $709.7 million compared with $364.4 million recorded on Dec 31, 2018. Long-term debt declined 5.4% to $4,673.1 million from the end of 2018.
In 2019, the company generated net cash of $1,461.8 million from operating activities, up 2.2% year over year.
Capital expenditure during the fourth quarter totaled $10 million, lower than the year-ago figure of $15 million. Adjusted free cash flow in the quarter was up 1% to $453 million.
Outlook
For 2020, adjusted earnings per share are anticipated to be $13.30-$13.60, with organic revenue growth of 6-7%.
For the first quarter of 2020, earnings are projected to be $2.94-$3.00 per share.
Barnes Group delivered positive earnings surprise of 4.21%, on average, in the trailing four quarters.
Berry Global delivered positive earnings surprise of 0.70%, on average, in the trailing four quarters.
Cintas pulled off positive earnings surprise of 8.50%, on average, in the trailing four quarters.
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Roper's (ROP) Q4 Earnings Surpass Estimates, Revenues Miss
Roper Technologies, Inc. (ROP - Free Report) delivered fourth-quarter 2019 positive earnings surprise of 1.5%.
Adjusted earnings were $3.39 per share, surpassing the Zacks Consensus Estimate of $3.34. Also, the bottom line increased 5.3% from the year-ago quarter number of $3.22 backed by solid revenue growth.
In 2019, the company’s adjusted earnings were $13.05 per share, increasing 10% from the year-ago figure of $11.81.
Inside the Headlines
Roper’s net revenues were $1,394.8 million, up 1.3% year over year. Notably, adjusted revenues totaled $1,400 million, up 2% year over year. The rise was primarily driven by 1% organic growth and 1% gain from acquired assets. However, the top line missed the Zacks Consensus Estimate of $1,419 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:
Application Software’s revenues totaled $410.8 million, representing 29.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 4.7%.
Network Software & Systems generated revenues of $425.8 million, accounting for roughly 30.5% of fourth-quarter revenues. Sales grew 19.8% year over year.
Measurement & Analytical Solutions generated revenues of $387.9 million, accounting for roughly 27.8% of the quarter’s top line. Sales declined 13.1% year over year.
Process Technologies generated revenues of $170.3 million, accounting for roughly 12.1% of the quarter’s revenues. Sales edged down 6.5% year over year.
Margin Details
In the October-December quarter, Roper’s cost of sales decreased 0.3% year over year to $501.9 million. Cost of sales was 35.9% of the quarter’s revenues compared with 36.6% a year ago. Adjusted gross profit increased 3% to $898 million, with margin of 64.1% reflecting expansion of 60 basis points (bps).
Selling, general and administrative expenses fell 2.8% to $494.5 million. It represented 35.3% of total revenues compared with 36.9% in the year-ago quarter. Operating profit improved 0.2% to $440.7 million with margin of 31.6%, down 40 bps year over year.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Roper had cash and cash equivalents of $709.7 million compared with $364.4 million recorded on Dec 31, 2018. Long-term debt declined 5.4% to $4,673.1 million from the end of 2018.
In 2019, the company generated net cash of $1,461.8 million from operating activities, up 2.2% year over year.
Capital expenditure during the fourth quarter totaled $10 million, lower than the year-ago figure of $15 million. Adjusted free cash flow in the quarter was up 1% to $453 million.
Outlook
For 2020, adjusted earnings per share are anticipated to be $13.30-$13.60, with organic revenue growth of 6-7%.
For the first quarter of 2020, earnings are projected to be $2.94-$3.00 per share.
Zacks Rank & Stocks to Consider
Roper currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Industrial Products sector are Barnes Group, Inc. (B - Free Report) , Berry Global Group, Inc. (BERY - Free Report) Cintas Corporation (CTAS - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Barnes Group delivered positive earnings surprise of 4.21%, on average, in the trailing four quarters.
Berry Global delivered positive earnings surprise of 0.70%, on average, in the trailing four quarters.
Cintas pulled off positive earnings surprise of 8.50%, on average, in the trailing four quarters.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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