Industrial solutions provider Roper Industries, Inc. (ROP) reported Monday a profit for the first quarter that increased 15 percent from last year, driven by improved margins and higher sales amid new order growth.
Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also raised its earnings forecast for the full-year 2013, citing accretion from the acquisition of Managed Health Care Associates, Inc. or MHA.
The company said it expects to complete the MHA acquisition later in the week. The company agreed to acquire privately-held health care services provider MHA in an all-cash deal valued at $1 billion, which Roper expects will bolster its existing medical business.
The company expects the acquisition to be immediately cash accretive and to generate $95 million of EBITDA over the first twelve months of ownership, excluding the impact of acquisition-related fair value accounting.
"We are pleased to deliver record first quarter performance, establishing records for revenue, orders, gross margin, operating profit, net earnings and cash flow. Despite a challenging global economic environment, our businesses performed exceptionally well," Chairman, President and CEO Brian Jellison said in a statement.
The Sarasota, Florida-based company reported net earnings of $124.91 million or $1.25 per share for the first quarter, higher than $108.31 million or $1.09 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $127.25 million or $1.27 per share. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $1.22 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 4 percent to $737.14 million from $711.07 million in the same quarter last year. Adjusted revenue, which excludes a fair value adjustment to acquired deferred revenue, was $741 million, missing seven Wall Street analysts' consensus estimate of $776.55 million.
In the sales growth, acquisitions resulted in 7 percent increase, while organic sales decline was 3 percent.
Total new orders increased 9 percent to a record of $793.58 million from prior-year quarter's $729.39 million, and represented a book-to-bill ratio of 1.07.
"We secured significant orders for second half delivery, helping increase our backlog to $1.0 billion and supporting our ability to deliver improving organic growth throughout the year," Jellison added.
Operating margin percentage improved 150 basis points to 25.1 percent from the year ago, and gross margin percentage expanded 220 basis points to 57.2 percent from last year.
Looking ahead to fiscal 2013, Roper raised its earnings guidance to a range of $5.76 to $5.94 per share from the prior forecast of $5.60 to $5.82 per share. Analysts expect the company to report earnings of $5.73 per share for the full-year 2013.
ROP closed Friday's regular trading session at $123.31, down $0.51 on a volume of 0.25 million shares.
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