A month has gone by since the last earnings report for Idex (IEX Quick QuoteIEX - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Idex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

IDEX Q1 Earnings Surpass Estimates, Revenues Down Y/Y

IDEX’s first-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1% from the year-ago quarter’s figure of earnings of $2.09 per share. However, it exceeded management’s projection of $1.70-$1.75 per share.

Revenue Details

In the quarter under review, IDEX’s net sales of $800.5 million underperformed the Zacks Consensus Estimate of $805 million.  The top line also decreased 5.3% year over year. Organic sales in the quarter decreased 6% year over year. Acquisitions/divestitures boosted sales by 1%.

IEX reports net sales under three business segments, the results of which are discussed below:

Revenues from the Fluid & Metering Technologies segment totaled $313.7 million, decreasing 3% year over year. Organic sales were down 3%.

Revenues from the Health & Science Technologies segment totaled $310.1 million, indicating a year-over-year decline of 12%. Organic sales in the quarter declined 13% year over year while acquired assets boosted sales by 1%.

Revenues from the Fire & Safety/Diversified Products segment totaled $178.0 million, rising 2% year over year. The results were aided by a 2% increase in organic sales.

Margin Profile

In the quarter under review, IDEX’s cost of sales decreased 4.3% year over year to $443.1 million. The gross profit was $357.4 million, down 6.6% year over year, while the gross margin was 45% compared with 45.2% reported in the year-ago quarter.

Selling, general and administrative expenses increased 2.9% year over year to $195.1 million. Adjusted EBITDA in the quarter under review decreased 9.4% year over year to $208.3 million. The adjusted EBITDA margin decreased 120 bps year over year to 26%.

The operating income was $161.2 million, down 16.2% year over year, whereas the margin was 20.1%, down 260 bps year over year. Interest expenses in the quarter decreased 28.2% year over year to $9.4 million.

Balance Sheet and Cash Flow

While exiting the first quarter, IDEX’s cash and cash equivalents were $616.3 million compared with $534.3 million recorded at the end of fourth-quarter 2023. Long-term borrowings were $1.32 billion compared with $1.33 billion recorded at the end of fourth-quarter 2023.

In the first three months of 2024, IDEX generated net cash of $156.6 million from operating activities, increasing 5.9% from the year-ago period. Capital used for purchasing property, plant and equipment was $20 million compared with $26.6 million in the first three months of 2023. In the first three months, free cash flow was $136.6 million, up 12.6% year over year.

IEX paid out dividends totaling $48.5 million in the first three months of 2024, up 6.6% year over year.

Outlook

For second-quarter 2024, IDEX anticipates adjusted earnings to be $2.00-$2.05 per share.

On a GAAP basis, IEX predicts earnings to be $1.75-$1.80 per share and a 2-3% decline in organic sales from the respective year-ago readings.

For 2024, IDEX anticipates adjusted earnings to be $8.15-$8.45 per share. The figure represents an increase from earnings of $8.22 per share reported in 2023. On a GAAP basis, earnings are predicted to be $7.13-$7.43 per share.

Organic sales are predicted to decline 0-2% in 2024.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Idex has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Idex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Idex belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Crane (CR Quick QuoteCR - Free Report) , has gained 3.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Crane reported revenues of $565.3 million in the last reported quarter, representing a year-over-year change of +10%. EPS of $1.22 for the same period compares with $1.25 a year ago.

Crane is expected to post earnings of $1.22 per share for the current quarter, representing a year-over-year change of +10.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.1%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Crane. Also, the stock has a VGM Score of F.