Roper Industries Q2 Adj. Profit Beats View, Revenues Miss; Lowers 2013 Outlook

(RTTNews) - Industrial solutions provider Roper Industries Inc. (ROP) on Monday reported a 3 percent decline in profit for the second quarter from the prior year, as higher sales were offset by a charge in the industry technology segment. However, adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

Looking ahead, the company lowered its fiscal 2013 earnings outlook and also lowered its organic revenue growth forecast for the second half of the year.

The Sarasota, Florida-based company's second-quarter net earnings declined to $111.35 million or $1.11 per share from $114.81 million or $1.15 per share in the same quarter last year.

The latest quarter's results include a pretax charge of $9.1 million, or $0.06 per share in the Industrial Technology segment.

Roper Industries determined that a vendor-supplied component in a refrigeration-system valve did not meet its quality standards and decided to exchange the affected product. The company recorded this charge to reflect the estimated program cost, while it engages in an ongoing discussion with the vendor.

Adjusted earnings per share for the latest quarter were $1.31. On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.30 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 8 percent to $784.01 million from $724.87 million in the prior-year quarter. Analysts had a consensus revenue estimate for the quarter of $806.67 million.

Organic revenue growth for the quarter was 1 percent. Adjusted gross margin for the quarter was 57.9 percent, up 300 basis points over the prior year. However, operating margin declined to 25.6 percent from 27.1 percent in the year-ago period.

Net orders for the quarter increased 7 percent from the year-ago period to $816.51 million and represented a book-to-bill ratio of 1.04.

Looking ahead to fiscal 2013, Roper Industries lowered its outlook for adjusted earnings to a range of $5.72 to $5.86 per share from the prior range of $5.76 to $5.94 per share. Analysts expect the company to report earnings of $5.82 per share for the year.

Roper Industries expects total sales growth in the second half of the year to be 12 percent to 14 percent. The company noted that contributions from acquisitions continue to be on track and due to changes in certain niche businesses, it expects second-half organic growth between 6 percent and 8 percent, compared to its prior expectation of 7 perent to 9 percent.

ROP closed Friday's regular trading session at $131.21, down $0.35 on a volume of 500,700 shares.