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IDEX Corporation IEX reported better-than-expected results for the first quarter of 2019. It pulled off a positive earnings surprise of 5.11%.
The company’s adjusted earnings per share were $1.44, surpassing the Zacks Consensus Estimate of $1.37.
Further, the bottom line increased 12% from the year-ago quarter figure of $1.29. The improvement was driven by healthy organic growth and diligent execution of productivity initiatives.
IDEX Corporation Price, Consensus and EPS Surprise
IDEX Corporation Price, Consensus and EPS Surprise | IDEX Corporation Quote
IDEX generated revenues of $622.2 million in the quarter under review, reflecting year-over-year growth of 2%. The top-line improvement came on the back of 4% growth in organic sales, partially offset by 2% adverse impact of forex woes.
However, the top line lagged the consensus estimate of $635 million by 2%.
In the first quarter, orders increased 4% year over year to $655.5 million. As noted, organically orders improved 6%, acquisitions had positive impact of 1% and foreign currency movements had an adverse 3% impact.
IDEX reports revenues under the segments discussed below:
Net sales of Fluid & Metering Technologies (“FMT”) were $242.5 million, up 4% year over year. Organic net sales grew 6% while forex headwinds had 2% impact.
Revenues from Health & Science Technologies (“HST”) totaled $225.3 million, reflecting year-over-year growth of 2%. Results were driven by 3% organic sales growth and 1% gain from acquisitions, partially offset by forex woes of 2%.
Fire & Safety/Diversified Products (“FSDP”) revenues were $156.2 million, down 2% from the year-ago quarter. Organic sales improved 1% while currency translation had adverse 3% impact.
Margin Details
In the reported quarter, IDEX’s cost of sales increased 0.8% year over year to $338.4 million. It represented 55.4% of the quarter’s revenues compared with 54.8% in the year-ago quarter. Gross margin improved 40 basis points (bps) to 45.6% on the back of benefits from higher volumes, pricing and productivity actions. However, rise in engineering costs played spoilsport. Selling, general and administrative expenses decreased marginally to $136.5 million. It represented 21.9% of revenues compared with 22.5% a year ago.
Adjusted operating income increased 8.1% to $147.8 million, and margin improved 120 bps to 23.8%. On a segmental basis, adjusted operating income for the FMT segment increased 8.4% to $71.9 million and that for HST expanded 2.5% to $54.2 million while for FSDP it increased 1.5% to $40.3 million. Adjusted effective tax rate in the reported quarter was 19.5%.