IDEX (IEX) Q1 Earnings & Revenues Beat, Increase Y/Y
IDEX Corporation IEX reported impressive first-quarter 2023 results. The company’s earnings surpassed the Zacks Consensus Estimate by 3%, whereas sales beat the same by 3.4%.
In the reported quarter, IDEX’s adjusted earnings were $2.09 per share, beating the Zacks Consensus Estimate of $2.03 per share. Our estimate for first-quarter adjusted earnings was $2.01 per share. On a year-over-year basis, the bottom line increased 6.6% from the year-ago quarter’s $1.96. Healthy segmental results favorably impacted the quarter’s earnings.
Earnings for the first quarter exceeded management’s projection of $1.98-$2.03 per share.
Revenue Details
In the quarter under review, IDEX’s net sales were $845.4 million, reflecting year-over-year growth of 12.6%. Organic sales in the quarter increased 6% year over year, higher than 3-5% growth expected by IEX. Acquired assets boosted sales 9%. Foreign currency translation left a negative impact of 2%.
IDEX’s top line surpassed the Zacks Consensus Estimate of $817 million. Our estimate for net sales in the reported quarter was $823.2 million.
IEX reports net sales under three business segments, the results of which are discussed below:
Revenues from Fluid & Metering Technologies totaled $321.8 million, increasing 18% year over year. Our estimate for segmental revenues was $301.9 million. Organic sales were up 9% and synergies from acquired assets added 11%. Foreign currency translation left a negative impact of 2%.
Revenues from Health & Science Technologies totaled $351 million, reflecting year-over-year growth of 11%. Our estimate for segmental revenues was $346.4 million. Organic sales in the quarter increased 3% year over year, while acquired assets boosted sales 11%. Foreign currency translation left a negative impact of 3%.
Revenues from Fire & Safety/Diversified Products totaled $174.4 million, rising 6% year over year. Our estimate for segmental revenues was $175.8 million. The results were aided by a 9% increase in organic sales but suffered 3% forex woes.
IDEX Corporation Price, Consensus and EPS Surprise
IDEX Corporation price-consensus-eps-surprise-chart | IDEX Corporation Quote
Margin Profile
In the quarter under review, IDEX’s cost of sales increased 13.3% year over year to $462.9 million. The gross profit was $382.5 million, up 11.7% year over year, while the gross margin was 45.2%, compared with 45.6% reported in the year-ago quarter.
Selling, general and administrative expenses increased 22.9% year over year to $189.7 million. The same represented 22.4% of revenues. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter under review increased 7% year over year to $229.8 million. The adjusted EBITDA margin decreased 140 bps year over year to 28.6%.
The operating income was $192.3 million, up 2.5% year over year, whereas the margin was 22.7%, down 230 bps year over year. Interest expenses in the quarter increased 37.9% year over year to $13.1 million.
Balance Sheet and Cash Flow
While exiting the first quarter, IDEX’s cash and cash equivalents decreased 18.7% to $510.7 million, compared with $430.2 million recorded at the end of fourth-quarter 2022. Long-term borrowings were $1,470.7 million, compared with $1,468.7 million recorded at the end of fourth-quarter 2022.
In the first three months of 2023, IDEX generated net cash of $147.9 million from operating activities, increasing 85.7% from the year-ago period. Capital used for purchasing property, plant and equipment was $26.6 million, compared with $16.1 million in December 2022. Free cash flow was $121.3 million, up 90.7% year over year.
IEX paid out dividends totaling $45.5 million. However, the company did not repurchase any common stock in the quarter.
IEX did not spend any amount on acquisitions in the first three months of 2023.
Outlook
For second-quarter 2023, IDEX anticipates adjusted earnings of $2.10-$2.13 per share and approximately 3% growth in organic sales from the respective year-ago readings.
IEX predicts EPS of $1.86-$1.89 per share for second-quarter 2023.
For 2023, IDEX anticipates adjusted earnings of $8.25-$8.55 per share, compared with $8.50-$8.80 per share anticipated earlier. Full-year earnings are predicted to be $7.30-$7.60 per share, compared with $7.55-$7.85 per share expected earlier.
Organic sales are predicted to grow 0-3% for 2023, compared with 1-5% predicted earlier.
Zacks Rank & Stocks to Consider
IEX currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:
Alamo Group Inc. ALG presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
ALG’s earnings surprise in the last four quarters was 6.0%, on average. In the past 60 days, estimates for Alamo’s 2023 earnings have increased 7.5%. The stock has gained 17.5% in the past six months.
Ingersoll Rand Inc. IR presently sports a Zacks Rank of 1. IR’s earnings surprise in the last four quarters was 8.5%, on average.
In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 3.3%. The stock has rallied 5.8% in the past six months.
Allegion plc ALLE presently carries a Zacks Rank #2 (Buy). ALLE’s earnings surprise in the last four quarters was 10.3%, on average.
In the past 60 days, Allegion’s earnings estimates have increased 1.1% for 2023. The stock has gained 1.2% in the past six months.
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Allegion PLC (ALLE) : Free Stock Analysis Report
