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Mettler-Toledo (MTD) Q1 Earnings Top Estimates, Sales Fall Y/Y
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Mettler-Toledo International, Inc. (MTD - Free Report) reported first-quarter 2024 adjusted earnings of $8.89 per share, which beat the Zacks Consensus Estimate by 16.8%. The bottom line increased 2% on a year-over-year basis.
Net sales of $925.95 million surpassed the Zacks Consensus Estimate of $880.7 million. However, the figure was down 0.3% on a reported basis and flat on a currency-neutral basis from the year-ago quarter.
Softness in the Food Retail segment and weakening conditions in the Asia/Rest of the World region were headwinds. Sluggish market demand in China was concerning.
Nevertheless, the improving Laboratory segment was a positive. Growing momentum across the Americas and Europe was another major tailwind.
MTD has gained 21.3% on a year-to-date basis, outperforming the industry’s growth of 4.6%.
The company remains apprehensive due to challenging market conditions in China, as well as overall dynamic market conditions.
We believe that the solid execution of the company’s Spinnaker and SternDrive programs is likely to aid its financial performance in the days ahead. Also, its portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
By Segments: MTD reports revenues under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which generated sales of $525 million (57% of the total sales), $352 million (38% of the total sales) and $49 million (5% of the total sales), respectively, in the first quarter.
The Laboratory segment witnessed year-over-year growth of 0.9%, while the Industrial and Food Retail segments declined 0.8% and 9.3%, respectively, on a reported basis.
By Geography: Total sales from the Americas, Europe and Asia/Rest of the World were $384 million (41% of the total sales), $274 million (30% of the total sales) and $268 million (29% of the total sales), respectively.
Sales in the Americas and Europe grew 3.2% and 7.9% year over year, respectively, on a reported basis. Asia/Rest of the World sales went down 11.6% on a year-over-year basis.
Operating Results
The gross margin was 59.2%, expanding 30 basis points (bps) year over year.
Research & development (“R&D”) expenses were $46.4 million, up 2.1% from the year-ago quarter. Selling, general & administrative (“SG&A”) expenses decreased 0.1% year over year to $234.4 million.
As a percentage of sales, R&D expenses expanded by 10 bps year over year to 5%. SG&A expenses remained flat as a percentage of sales.
The adjusted operating margin was 28.9%, which expanded 20 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Mettler-Toledo’s cash and cash-equivalent balance was $70.2 million, up from $69.8 million as of Dec 31, 2023.
The long-term debt was $1.90 billion at the end of the first quarter compared with $1.89 billion at the end of the fourth quarter.
Mettler-Toledo generated $189.9 million in cash from operating activities in the reported quarter compared with $281.5 million in the previous quarter. The free cash flow was $182.3 million in the reported quarter.
Guidance
For second-quarter 2024, Mettler-Toledo anticipates sales to decline 4% in local currency from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $937.6 million.
Adjusted earnings are anticipated to be $8.90-$9.05 per share, implying an 11-13% fall from the year-ago quarter’s reported number. It also includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for earnings is pinned at $9.54 per share.
For 2024, Mettler-Toledo anticipates sales in local currency to be up 2% from the year-earlier figure. The Zacks Consensus Estimate for 2024 sales is pegged at $3.82 billion.
The company increased its guidance for adjusted EPS from $39.60-$40.30 to $39.90-$40.40. The new guidance range suggests growth of 5-6% from the year-ago reported number, which includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for the same is pinned at $39.90.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #4 (Sell).
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Mettler-Toledo (MTD) Q1 Earnings Top Estimates, Sales Fall Y/Y
Mettler-Toledo International, Inc. (MTD - Free Report) reported first-quarter 2024 adjusted earnings of $8.89 per share, which beat the Zacks Consensus Estimate by 16.8%. The bottom line increased 2% on a year-over-year basis.
Net sales of $925.95 million surpassed the Zacks Consensus Estimate of $880.7 million. However, the figure was down 0.3% on a reported basis and flat on a currency-neutral basis from the year-ago quarter.
Softness in the Food Retail segment and weakening conditions in the Asia/Rest of the World region were headwinds. Sluggish market demand in China was concerning.
Nevertheless, the improving Laboratory segment was a positive. Growing momentum across the Americas and Europe was another major tailwind.
MTD has gained 21.3% on a year-to-date basis, outperforming the industry’s growth of 4.6%.
The company remains apprehensive due to challenging market conditions in China, as well as overall dynamic market conditions.
We believe that the solid execution of the company’s Spinnaker and SternDrive programs is likely to aid its financial performance in the days ahead. Also, its portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
Mettler-Toledo International, Inc. price-consensus-eps-surprise-chart | Mettler-Toledo International, Inc. Quote
Top Line in Detail
By Segments: MTD reports revenues under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which generated sales of $525 million (57% of the total sales), $352 million (38% of the total sales) and $49 million (5% of the total sales), respectively, in the first quarter.
The Laboratory segment witnessed year-over-year growth of 0.9%, while the Industrial and Food Retail segments declined 0.8% and 9.3%, respectively, on a reported basis.
By Geography: Total sales from the Americas, Europe and Asia/Rest of the World were $384 million (41% of the total sales), $274 million (30% of the total sales) and $268 million (29% of the total sales), respectively.
Sales in the Americas and Europe grew 3.2% and 7.9% year over year, respectively, on a reported basis. Asia/Rest of the World sales went down 11.6% on a year-over-year basis.
Operating Results
The gross margin was 59.2%, expanding 30 basis points (bps) year over year.
Research & development (“R&D”) expenses were $46.4 million, up 2.1% from the year-ago quarter. Selling, general & administrative (“SG&A”) expenses decreased 0.1% year over year to $234.4 million.
As a percentage of sales, R&D expenses expanded by 10 bps year over year to 5%. SG&A expenses remained flat as a percentage of sales.
The adjusted operating margin was 28.9%, which expanded 20 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Mettler-Toledo’s cash and cash-equivalent balance was $70.2 million, up from $69.8 million as of Dec 31, 2023.
The long-term debt was $1.90 billion at the end of the first quarter compared with $1.89 billion at the end of the fourth quarter.
Mettler-Toledo generated $189.9 million in cash from operating activities in the reported quarter compared with $281.5 million in the previous quarter. The free cash flow was $182.3 million in the reported quarter.
Guidance
For second-quarter 2024, Mettler-Toledo anticipates sales to decline 4% in local currency from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $937.6 million.
Adjusted earnings are anticipated to be $8.90-$9.05 per share, implying an 11-13% fall from the year-ago quarter’s reported number. It also includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for earnings is pinned at $9.54 per share.
For 2024, Mettler-Toledo anticipates sales in local currency to be up 2% from the year-earlier figure. The Zacks Consensus Estimate for 2024 sales is pegged at $3.82 billion.
The company increased its guidance for adjusted EPS from $39.60-$40.30 to $39.90-$40.40. The new guidance range suggests growth of 5-6% from the year-ago reported number, which includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for the same is pinned at $39.90.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Akoustis Technologies (AKTS - Free Report) , NVIDIA (NVDA - Free Report) and Intrusion (INTZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Akoustis Technologies’ shares have declined 31.6% year to date. AKTS is scheduled to release third-quarter fiscal 2024 results on May 13.
NVIDIA has surged 82.6% year to date. NVDA is scheduled to release first-quarter fiscal 2025 results on May 22.
Intrusion’s shares have declined 69.6% year to date. INTZ is set to report first-quarter 2024 results on May 14.