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Mettler-Toledo (MTD) Q2 Earnings Top Estimates, Sales Fall Y/Y
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Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2024 adjusted earnings of $9.65 per share, which beat the Zacks Consensus Estimate by 7.2%. The bottom line decreased 5% on a year-over-year basis.
Net sales of $946.75 million surpassed the Zacks Consensus Estimate of $924 million. However, the figure was down 4% on a reported basis and 2% on a currency-neutral basis from the year-ago quarter.
Softness in the Food Retail and Industrial segments was concerning.
Weakening conditions in the Asia/Rest of the World region were significant headwinds. Sluggish market demand in China was another negative.
Nevertheless, the improving Laboratory segment was a positive. Growing momentum across the Americas and Europe was another major tailwind.
MTD has gained 24.9% on a year-to-date basis, outperforming the industry’s growth of 14.5%.
The company’s 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 $523 million (55% of the total sales), $374 million (40% of the total sales) and $49 million (5% of the total sales), respectively, in the second quarter.
The Laboratory segment witnessed year-over-year growth of 1%, while the Industrial and Food Retail segments declined 5% and 12%, respectively, on a local currency basis.
By Geography: Total sales from the Americas, Europe and Asia/Rest of the World were $404 million (43% of the total sales), $259 million (27%) and $284 million (30%), respectively.
Sales in the Americas and Europe grew 2% and 6% year over year, respectively, on a local currency basis. Meanwhile, Asia/Rest of the World sales went down 13%.
Operating Results
The gross margin was 59.7%, expanding 30 basis points (bps) year over year.
Research & development (“R&D”) expenses were $45.8 million, down 3.1% from the year-ago quarter. Selling, general & administrative (“SG&A”) expenses increased 3.2% year over year to $235.8 million.
As a percentage of sales, R&D expenses were flat year over year at 5%. SG&A expenses expanded 160 bps year over year as a percentage of sales.
The adjusted operating margin was 30%, which contracted 130 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Mettler-Toledo’s cash and cash-equivalent balance was $70.8 million, up from $70.2 million as of Mar 31, 2024.
The long-term debt was $1.75 billion at the end of the second quarter compared with $1.9 billion at the end of the first quarter.
Mettler-Toledo generated $257.5 million in cash from operating activities in the reported quarter compared with $189.9 million in the previous quarter. The free cash flow was $251.05 million in the reported quarter.
Guidance
For third-quarter 2024, Mettler-Toledo anticipates sales to increase 1% in local currency from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $969.64 million.
Adjusted earnings are anticipated to be $9.90-$10.05 per share, implying 1-3% growth from the year-ago quarter’s reported number. It also includes a foreign-currency headwind of 1%. The Zacks Consensus Estimate for earnings is pinned at $10.59 per share.
For 2024, Mettler-Toledo anticipates sales in local currency to rise 2% from the year-earlier reported figure. The Zacks Consensus Estimate for 2024 sales is pegged at $3.82 billion.
The company increased its guidance for the adjusted EPS from $39.90-$40.40 to $40.20-$40.50. The new guidance range suggests growth of 6-8% from the year-ago reported number, which includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for the same is pinned at $40.13.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #3 (Hold).
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Mettler-Toledo (MTD) Q2 Earnings Top Estimates, Sales Fall Y/Y
Mettler-Toledo International, Inc. (MTD - Free Report) reported second-quarter 2024 adjusted earnings of $9.65 per share, which beat the Zacks Consensus Estimate by 7.2%. The bottom line decreased 5% on a year-over-year basis.
Net sales of $946.75 million surpassed the Zacks Consensus Estimate of $924 million. However, the figure was down 4% on a reported basis and 2% on a currency-neutral basis from the year-ago quarter.
Softness in the Food Retail and Industrial segments was concerning.
Weakening conditions in the Asia/Rest of the World region were significant headwinds. Sluggish market demand in China was another negative.
Nevertheless, the improving Laboratory segment was a positive. Growing momentum across the Americas and Europe was another major tailwind.
MTD has gained 24.9% on a year-to-date basis, outperforming the industry’s growth of 14.5%.
The company’s 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 $523 million (55% of the total sales), $374 million (40% of the total sales) and $49 million (5% of the total sales), respectively, in the second quarter.
The Laboratory segment witnessed year-over-year growth of 1%, while the Industrial and Food Retail segments declined 5% and 12%, respectively, on a local currency basis.
By Geography: Total sales from the Americas, Europe and Asia/Rest of the World were $404 million (43% of the total sales), $259 million (27%) and $284 million (30%), respectively.
Sales in the Americas and Europe grew 2% and 6% year over year, respectively, on a local currency basis. Meanwhile, Asia/Rest of the World sales went down 13%.
Operating Results
The gross margin was 59.7%, expanding 30 basis points (bps) year over year.
Research & development (“R&D”) expenses were $45.8 million, down 3.1% from the year-ago quarter. Selling, general & administrative (“SG&A”) expenses increased 3.2% year over year to $235.8 million.
As a percentage of sales, R&D expenses were flat year over year at 5%. SG&A expenses expanded 160 bps year over year as a percentage of sales.
The adjusted operating margin was 30%, which contracted 130 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Mettler-Toledo’s cash and cash-equivalent balance was $70.8 million, up from $70.2 million as of Mar 31, 2024.
The long-term debt was $1.75 billion at the end of the second quarter compared with $1.9 billion at the end of the first quarter.
Mettler-Toledo generated $257.5 million in cash from operating activities in the reported quarter compared with $189.9 million in the previous quarter. The free cash flow was $251.05 million in the reported quarter.
Guidance
For third-quarter 2024, Mettler-Toledo anticipates sales to increase 1% in local currency from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $969.64 million.
Adjusted earnings are anticipated to be $9.90-$10.05 per share, implying 1-3% growth from the year-ago quarter’s reported number. It also includes a foreign-currency headwind of 1%. The Zacks Consensus Estimate for earnings is pinned at $10.59 per share.
For 2024, Mettler-Toledo anticipates sales in local currency to rise 2% from the year-earlier reported figure. The Zacks Consensus Estimate for 2024 sales is pegged at $3.82 billion.
The company increased its guidance for the adjusted EPS from $39.90-$40.40 to $40.20-$40.50. The new guidance range suggests growth of 6-8% from the year-ago reported number, which includes a foreign-currency headwind of 2%. The Zacks Consensus Estimate for the same is pinned at $40.13.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and Apple (AAPL - Free Report) . Badger Meter sports a Zacks Rank #1 (Strong Buy) at present, and Arista Networks and Apple carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter shares have gained 31.3% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 17.92%.
Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is projected at 17.20%.
Apple shares have gained 16.4% in the year-to-date period. The long-term earnings growth rate for AAPL is projected at 12.71%.