Roper Technologies, Inc. ROP delivered second-quarter 2019 positive earnings surprise of about 1%.
Adjusted earnings were $3.07 per share, surpassing the Zacks Consensus Estimate of $3.04. Also, the bottom line increased 6.2% from the year-ago quarter number of $2.89 backed by solid revenue growth.
Inside the Headlines
Roper’s adjusted revenues came in at $1,332 million, up 3% year over year. The rise was primarily driven by 2% organic growth and 2% gain from acquired assets, partially offset by 1% adverse impact of unfavorable movements in foreign currencies. However, the top line missed the Zacks Consensus Estimate of $1,351 million.
Notably, GAAP revenues came in at $1,330 million, up from the year-ago reported figure of $1,294 million.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:
Application Software’s revenues totaled $390.6 million, representing 29.4% of the reported quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 9%.
Network Software & Systems segment generated revenues of $366.8 million, accounting for roughly 27.6% of second-quarter revenues. Sales grew 9.9% year over year.
Measurement & Analytical Solutions segment generated revenues of $408.4 million, accounting for roughly 30.7% of the quarter’s top line. Sales declined 4.1% year over year.
Process Technologies segment generated revenues of $164.5 million, accounting for roughly 12.3% of the June-ended quarter’s revenues. Sales edged down 6.4% year over year.
In the April-June quarter, Roper’s cost of sales increased 0.5% year over year to $480.3 million. Cost of sales was 36.1% of the quarter’s revenues compared with 36.9% a year ago. Adjusted gross profit in the quarter increased 4% to $852 million, with margin at 64%, reflecting expansion of 90 basis points (bps).
Selling, general and administrative expenses jumped 4.3% year over year to $481.6 million. It represented 36.2% of total revenues compared with 35.7% in the year-ago quarter. Operating profit jumped 4% to $415.1 million with margin of 31.2%, up 30 bps.
Balance Sheet & Cash Flow
Exiting the second quarter, Roper had cash and cash equivalents of $320.8 million compared with $364.4 million recorded on Dec 31, 2018. Long-term debt decreased 4.5% to $4,718.9 million from the end of 2018.
In first six months of 2019, the company generated net cash of $591.1 million from operating activities, roughly 7.9% higher from the year-ago period.
Capital expenditure during the second quarter totaled $12 million, lower than the year-ago figure of $13 million. Free cash flow in the quarter was up 14% to $286 million.
For 2019, adjusted earnings per share are anticipated to be $12.94-$13.06, higher than the range of $12.70-$13.00 guided earlier.
For the third quarter of 2019, earnings are projected to be $3.16-$3.20 per share.
Zacks Rank & Other Key Picks
Roper currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the same space are DXP Enterprises, Inc. DXPE, AptarGroup, Inc. ATR and Avery Dennison Corporation AVY. While DXP Enterprises sports a Zacks Rank #1, AptarGroup and Avery Dennison carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DXP Enterprises delivered average earnings surprise of 48.47% in the trailing four quarters.
AptarGroup pulled off average positive earnings surprise of 8.27% in the trailing four quarters.
Avery Dennison outpaced estimates in the last reported quarter by 1.10%.
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