Industrial solutions provider Roper Industries, Inc. (ROP) reported Monday a profit for the second quarter that increased 8 percent from last year, driven by improved margins and higher sales amid strong order growth.
Earnings per share matched analysts' expectations, while quarterly revenues missed their estimates. The company also raised its earnings forecast for the full-year 2012, citing accretion from the acquisition of Sunquest Information Systems, Inc.
"We are pleased with the performance of our businesses in the second quarter. We achieved record second quarter revenue and earnings, as our businesses continued to execute well in the current uncertain economic environment," Chairman, President and CEO Brian Jellison said in a statement.
Separately, Roper Industries agreed to acquire diagnostic and laboratory software provider Sunquest in an all-cash deal valued at $1.415 billion, including $25 million in cash tax benefits.
Tucson, Arizona, Sunquest provides a comprehensive suite of clinical and anatomic laboratory software solutions.
Roper expects the acquisition to be immediately cash accretive and to generate $140 million or more of EBITDA in 2013. The company said it expects to complete the deal within 30 days.
The Sarasota, Florida-based company reported net earnings of $114.81 million or $1.15 per share for the second quarter, higher than $106.31 million or $1.08 per share in the prior-year quarter.
Excluding a foreign currency re-measurement gain on inter-company debt in the prior year, net earnings were up 13 percent.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $1.15 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 4 percent to $724.87 million from $699.87 million in the same quarter last year,but missed six Wall Street analysts' consensus estimate of $746.97 million.
In the sales growth, acquisitions resulted in 3 percent increase and the organic sales growth was 3 percent, while foreign exchange reduced sales by 2 percent.
Total new orders increased 8 percent to a record of $763 million from prior-year quarter's $707.69 million.
"Organic growth was consistent with our expectations in the quarter, and our focus on breakeven ratios, cost discipline and operating leverage resulted in exceptional margin performance," Jellison added.
Operating margin percentage increased 170 basis points to 27.1 percent from the year ago, and gross margin percentage expanded 100 basis points to 54.9 percent from last year.
Looking ahead to fiscal 2012, Roper raised its guidance for earnings to a range of $4.84 to $5.00 per share from the prior forecast of $4.75 to $4.91 per share. Analysts expect the company to report earnings of $4.83 per share for the full-year 2012.
ROP closed Friday's regular trading session at $98.59, up $1.85 on a volume of 0.48 million shares.
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