Roper Industries Q2 Adj. Profit Tops View, But Sales Miss; Trims 2015 Outlook

(RTTNews) - Industrial solutions provider Roper Industries, Inc. (ROP) reported Monday a profit for the second quarter that increased nine percent from last year, driven by improved margins and higher sales amid new order growth.

Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also provided weak earnings guidance for the third quarter, and trimmed earnings forecast for the full-year 2015.

"We were pleased with our performance in the second quarter. Continued growth in our Medical and RF Technology segments offset declines in energy-related markets. Our businesses acted quickly, taking appropriate cost actions in light of more difficult market conditions," Chairman, President and CEO Brian Jellison said in a statement.

The Sarasota, Florida-based company reported net earnings of $171.28 million or $1.69 per share for the second quarter, higher than $157.36 million or $1.56 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $1.70 per share, compared to $1.56 per share in the year-ago quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $1.64 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up 0.5 percent to $889.54 million from $885.18 million in the same quarter last year. Adjusted revenue was $892 million, missing nine Wall Street analysts' consensus estimate of $908.24 million.

The company said revenue from acquisitions completed in the last year contributed 4 percent growth, more than offsetting a 3 percent decline due to foreign exchange. Organic sales remained flat.

Medical & scientific imaging sales increased to $302.26 million from $268.89 million, and RF technology sales improved to $255.56 million from $245.60 million a year ago.

Meanwhile, industrial technology sales decreased to $186.47 million from $204.81 million, and energy systems & controls sales totaled $145.25 million, down from $165.87 million last year.

Operating margin percentage improved 80 basis points to 31.4 percent from last year's 30.6 percent as gross margin percentage expanded 90 basis points to 60.0 percent from last year.

Total new orders increased to $881.06 million from prior-year quarter's $873.92 million.

Looking ahead to the third quarter, the company expects adjusted earnings in a range of $1.53 to $1.57 per share, while analysts projected earnings of $1.72 per share.

For fiscal 2015, Roper trimmed adjusted earnings guidance to a range of $6.61 to $6.75 per share from the prior forecast of $6.75 to $6.95 per share. Street is currently looking for full-year 2015 earnings of $6.87 per share.

ROP closed Friday's regular trading session at $172.11, down $1.36 on a volume of 0.44 million shares.