Filtration products maker Pall Corp. (PLL) said Thursday after the markets closed that its second quarter profit rose 27.5% from last year, helped by higher sales and improved gross margins. However, the company's quarterly earnings per share came in below analysts' expectations as did its quarterly sales.
The company reported net income for the second quarter of $49.6 million or $0.42 per share, compared to $38.9 million or $0.33 per share for the year-ago quarter. Excluding restructuring and other charges, pro-forma net income for the year-ago quarter was $45.2 million or $0.38 per share.
On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.47 per share for the second quarter. Analysts' estimates typically exclude special items.
The company noted that the estimated impact of foreign currency translation increased second quarter 2010 earnings by $0.04 per share.
Gross margin for the second quarter improved to 50.7% from 47.2% in the prior year quarter, particularly reflecting favorable mix along with ongoing productivity enhancement efforts.
Sales for the second quarter increased 3.2% to $560.40 million from $543.30 million in the same quarter last year. Foreign currency translation increased second quarter sales by $32.5 million or 6%. Eight analysts had a consensus revenue estimate of $589.00 million for the second quarter.
Eric Krasnoff, Pall Chairman and CEO, said, "Life Sciences continues its strong performance. Operating profit increased 27% in the quarter following a 38% increase in the first quarter. These results were driven by exceptional performance in BioPharmaceuticals."
Second quarter sales for the company's life sciences segment increased 10% year-over year to $247.4 million, with BioPharmaceuticals sales up 14.7% and medical sales up 3.7%.
Second quarter sales for the company's industrial segment declined 1.7% to $313.0 million, with Energy, Water & Process Technologies sales down 3.5% and Aerospace & Transportation down 13% but Microelectronics sales up 20.6%..
For the first six months of its fiscal year, the company reported net income of $116.6 million or $0.98 per share, compared to $82.0 million or $0.68 per share for the same period last year.
Pro-forma net income for the first-half was $97.7 million or $0.82 per share, compared to $93.5 million or $0.78 per share in the prior year period.
Sales for the first-half declined slightly to $1.11 billion from $1.12 billion in the prior year's first-half.
Looking forward, the company said it now expects fiscal 2010 earnings, excluding discrete items, to be $1.95 to $2.05 per share, applying an estimated benefit from foreign currency translation of $0.09 per share based on current exchange rates. Previously, the company forecast fiscal 2010 earnings, excluding discrete items, to be $2.02 to $2.19 per share, applying a benefit from foreign currency translation of $0.17 per share.
Including the discrete items in the first half, the company now expects fiscal 2010 earnings to be in the range of $2.11 to $2.21 per share, compared to its prior guidance of $2.18 to $2.35 per share, which included discrete items in the first quarter.
Analysts currently expect the company to earn $2.07 per share for the fiscal year 2010.
Krasnoff concluded, "Pall Industrial orders and backlog are growing and we expect a return to top line growth in the second half of the fiscal year. We expect overall BioPharmaceuticals sales growth rate to moderate for the remainder of this fiscal year due to timing of demand within the biotechnology market. Company-wide system sales are forecast to grow as capital spending ramps up.
Pall shares, which have traded in a range of $18.20 to $41.82 over the past year, closed Thursday's regular trading session at $40.84, down 20 cents and lost an additional $1.64 or 4.02% in after hours trading.
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