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Mettler-Toledo International, Inc. MTD reported four-quarter 2020 adjusted earnings of $9.26 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line also improved 19% on a year-over-year basis and 31.9% sequentially.
Net sales of $937.9 million were up 11% on a reported basis and 7% on a currency-neutral basis from the respective year-ago quarter levels. Further, the top line rose 16.2% from the prior quarter. Also, the same surpassed the Zacks Consensus Estimate of $903.9 million.
Strong performance delivered by the company across all geographies, especially in China, remained a major positive. Further, growing momentum across the Laboratory and Food Retail segments in the reported quarter drove top-line growth.
Additionally, solid customer demand along with proper execution and cost-control strategiescontributed well.
However, headwinds related to the coronavirus continued to impact the company negatively. Moreover, uncertainties due to the ongoing pandemic are likely to linger in the near term.
Nevertheless, the company’s portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds amid the COVID-related uncertainties.
The stock has returned 56.3% on a year-to-date basis compared with the industry’s rally of 38.2%.
Top Line in Detail
By Segments: The company reports under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 56%, 38% and 6% of the net sales in the fourth quarter, respectively. Further, the Laboratory, Industrial and Food Retail segments witnessed year-over-year growth of 12%, 1% and 7%, respectively, in the quarter under review.
By Geography: The company reports total sales from the Americas, Europe and Asia/Rest of the World. All these regions contributed 36%, 32% and 32% to the net sales in the fourth quarter, respectively. Further, sales in Americas, Europe and Asia/Rest of the World went up 8%, 7% and 8%, respectively, on a year-over-year basis.
Gross margin was 59.6%, expanding 60 bps year over year.
Research & development (R&D) expenses were $39.9 million, up 12.9% from the year-ago quarter. Selling, general & administrative (SG&A) expenses increased 9.5% year over year to $226.4 million.
As a percentage of sales, R&D expenses expanded 10 bps year over year to 4.3%. Further, SG&A expenses contracted 40 bps year over year to 24.1%.
Adjusted operating margin was 31.2%, which expanded 80 bps from the prior-year quarter.
MettlerToledo International, Inc. Price, Consensus and EPS Surprise
MettlerToledo International, Inc. price-consensus-eps-surprise-chart | MettlerToledo International, Inc. Quote
Balance Sheet & Cash Flow
As of Dec 31, 2020, the company’s cash and cash equivalent balance was $95.2 million, down from $153.7 million on Sep 30, 2020.
Long-term debt was $1.3 billion at the end of the fourth quarter, increasing from $1.2 billion at the end of the third quarter.
Mettler-Toledo generated $250.9 million of cash from operating activities in the reported quarter, up from $225.1 million in the previous quarter. Free cash flow was $218.1 million in the reported quarter.
For first-quarter 2021, Mettler-Toledo anticipates sales growth between 11% and 13% on a year-over-year basis in local currency. The Zacks Consensus Estimate for sales is pegged at $718.2 million.
Adjusted first-quarter earnings are anticipated to be $5.55-$5.70 per share, implying a 39%-43% rise from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at $6.01 per share.
For 2021, the company anticipates year-over-year sales growth of 5%-7% in local currency. The Zacks Consensus Estimate for sales is pegged at $3.27 billion.
Adjusted 2021 earnings are anticipated to be $29.20-$29.80 per share. The Zacks Consensus Estimate for the same is pegged at $28.10 per share.
Zacks Rank & Other Stocks to Consider
Mettler-Toledo currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Take Two Interactive TTWO, CDW Corporation CDW, and CrowdStrike CRWD. All companies carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for Take Two Interactive, CDW, and CrowdStrike are currently pegged at 12%, 13.1% and 25%, respectively.
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