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Mettler-Toledo (MTD) Q3 Earnings Top Estimates, Revenues Lag
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Mettler-Toledo International, Inc. (MTD - Free Report) delivered third-quarter 2018 adjusted earnings of $5.12 per share, beating the Zacks Consensus Estimate by 13 cents and also came ahead of management’s guided range of $4.97-$5.02 per share. The figure increased 17.4% on a year-over-year basis and 10.1% sequentially.
Net sales of $734.85 million were up 5.1% year over year and 1.8% from the previous quarter. In local currency, sales grew 7% from the year-ago quarter, exceeding management’s expectation of 6% growth.
The robust performance of Laboratory business drove top-line growth. Further, strengthening Food business also contributed well. Further, Mettler-Toledo performed well in China which propelled growth.
However, revenues missed the Zacks Consensus Estimate of $739.76 million.
Nevertheless, the company remains confident on its 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 benefiting its business growth.
Coming to the price performance, shares of Mettler-Toledo have lost 3.9% on a year-to-date basis compared with the industry’s decline of 0.9%.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail Weighing Solutions which accounted for 50%, 42% and 8% of the net sales in the third quarter, respectively. Further, these segments witnessed year-over-year growth of 11%, 1% and 14% in the quarter under review, respectively.
By Geography: The company reports total sales figure from Americas, Europe and Asia/Rest of the World. All these regions contributed 38%, 30% and 32% to the net sales in the third quarter, respectively. Further, the sales in these regions went up 5%, 3% and 11% on a year-over-year basis.
Operating Results
Gross margin was 57.1%, contracting 30 basis points (bps) year over year.
Research & development (R&D) expenses were $34.8 million, up 8.2% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 2.2% year over year to $202.4 million.
Adjusted operating margin was 24.8%, which expanded 170 bps from the previous-year quarter.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
As of Sep 30, 2018, the company’s cash and cash equivalents balance was $137.4 million compared with $183.2 million as of Jun 30, 2018.
Long-term debt was $988.9 million, decreasing from $1.02 billion in the previous quarter.
Mettler-Toledo generated $149.8 million of cash from operating activities, up from $140.2 million in the prior quarter. Free cash flow was $121.3 million compared with $120.8 million in the second quarter.
Guidance
For fourth-quarter 2018, Mettler-Toledo expects sales growth of 6% in local currency. The Zacks Consensus Estimate for sales is pegged at $823.84 million.
Adjusted earnings are expected in the range of $6.72-$6.77 per share, up 13% year over year. The Zacks Consensus Estimate for earnings is projected at $6.81 per share.
However, management assumes that high tariff costs and unfavourable currency fluctuations are likely to bring 5% negative impact on earnings growth.
For 2018, the company continues to expect sales to grow 6% at local currency. The Zacks Consensus Estimate is projected at $2.95 billion.
Adjusted earnings are expected to be in the range of $20.20-$20.25 per share. The Zacks Consensus Estimate is pegged at $20.18 per share.
Zacks Rank and Stocks to Consider
Mettler-Toledo currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Twitter, Inc. , Intel Corporation (INTC - Free Report) and Adobe Systems Incorporated (ADBE - Free Report) . While Twitter and Intel sport a Zacks Rank #1 (Strong Buy), Adobe Systems carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Twitter, Intel and Adobe Systems is projected to be 22.05%, 8.42% and 16.4%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Mettler-Toledo (MTD) Q3 Earnings Top Estimates, Revenues Lag
Mettler-Toledo International, Inc. (MTD - Free Report) delivered third-quarter 2018 adjusted earnings of $5.12 per share, beating the Zacks Consensus Estimate by 13 cents and also came ahead of management’s guided range of $4.97-$5.02 per share. The figure increased 17.4% on a year-over-year basis and 10.1% sequentially.
Net sales of $734.85 million were up 5.1% year over year and 1.8% from the previous quarter. In local currency, sales grew 7% from the year-ago quarter, exceeding management’s expectation of 6% growth.
The robust performance of Laboratory business drove top-line growth. Further, strengthening Food business also contributed well. Further, Mettler-Toledo performed well in China which propelled growth.
However, revenues missed the Zacks Consensus Estimate of $739.76 million.
Nevertheless, the company remains confident on its 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 benefiting its business growth.
Coming to the price performance, shares of Mettler-Toledo have lost 3.9% on a year-to-date basis compared with the industry’s decline of 0.9%.
Top Line in Detail
By Segments: The company reports in three segments — Laboratory Instruments, Industrial Instruments and Food Retail Weighing Solutions which accounted for 50%, 42% and 8% of the net sales in the third quarter, respectively. Further, these segments witnessed year-over-year growth of 11%, 1% and 14% in the quarter under review, respectively.
By Geography: The company reports total sales figure from Americas, Europe and Asia/Rest of the World. All these regions contributed 38%, 30% and 32% to the net sales in the third quarter, respectively. Further, the sales in these regions went up 5%, 3% and 11% on a year-over-year basis.
Operating Results
Gross margin was 57.1%, contracting 30 basis points (bps) year over year.
Research & development (R&D) expenses were $34.8 million, up 8.2% from the year-ago quarter. Selling, general & administrative (SG&A) expenses decreased 2.2% year over year to $202.4 million.
Adjusted operating margin was 24.8%, which expanded 170 bps from the previous-year quarter.
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise
Mettler-Toledo International, Inc. Price, Consensus and EPS Surprise | Mettler-Toledo International, Inc. Quote
Balance Sheet and Cash Flow
As of Sep 30, 2018, the company’s cash and cash equivalents balance was $137.4 million compared with $183.2 million as of Jun 30, 2018.
Long-term debt was $988.9 million, decreasing from $1.02 billion in the previous quarter.
Mettler-Toledo generated $149.8 million of cash from operating activities, up from $140.2 million in the prior quarter. Free cash flow was $121.3 million compared with $120.8 million in the second quarter.
Guidance
For fourth-quarter 2018, Mettler-Toledo expects sales growth of 6% in local currency. The Zacks Consensus Estimate for sales is pegged at $823.84 million.
Adjusted earnings are expected in the range of $6.72-$6.77 per share, up 13% year over year. The Zacks Consensus Estimate for earnings is projected at $6.81 per share.
However, management assumes that high tariff costs and unfavourable currency fluctuations are likely to bring 5% negative impact on earnings growth.
For 2018, the company continues to expect sales to grow 6% at local currency. The Zacks Consensus Estimate is projected at $2.95 billion.
Adjusted earnings are expected to be in the range of $20.20-$20.25 per share. The Zacks Consensus Estimate is pegged at $20.18 per share.
Zacks Rank and Stocks to Consider
Mettler-Toledo currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Twitter, Inc. , Intel Corporation (INTC - Free Report) and Adobe Systems Incorporated (ADBE - Free Report) . While Twitter and Intel sport a Zacks Rank #1 (Strong Buy), Adobe Systems carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Twitter, Intel and Adobe Systems is projected to be 22.05%, 8.42% and 16.4%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>