Mettler-Toledo (MTD) Q1 Earnings & Sales Top Estimates, Up Y/Y

Mettler-Toledo (NYSE:MTD) International, Inc. MTD reported first-quarter 2021 adjusted earnings of $6.56 per share, which beat the Zacks Consensus Estimate by 16.1%. The bottom line also improved 64% on a year-over-year basis but declined 29.1% sequentially.

Net sales of $804.4 million were up 24% on a reported basis and 18% on a currency-neutral basis from the year-ago quarter. Also, the figure surpassed the Zacks Consensus Estimate of $758 million.

However, the topline was down 14.2% sequentially.

Strong performance delivered by the company across all geographies, especially in China, remained a major positive. Further, growing momentum across the Laboratory (NYSE:LH), Industrial and Food Retail segments in the reported quarter drove the year-over-year top-line growth.

Additionally, solid customer demand along with proper execution and cost-control strategiescontributed well.

However, headwinds related to the pandemic remain concerning for the company in the days ahead.

Nevertheless, its portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategiesare expected to remain tailwinds amid the COVID-related uncertainties.

MettlerToledo International, Inc. Price, Consensus and EPS Surprise

MettlerToledo International, Inc. price-consensus-eps-surprise-chart | MettlerToledo International, Inc. Quote

Top Line in Detail

By Segments: The company reports under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 55%, 39% and 6% of the net sales in the firstquarter, respectively. Further, the Laboratory, Industrial and Food Retail segments witnessed year-over-year growth of 20%, 17% and 13%, respectively, in the quarter under review.

By Geography: The company reports total salesfrom the Americas, Europe and Asia/Rest of the World. All the regions contributed 38%, 30% and 32% to net sales in the first quarter, respectively. Further, sales in the Americas, Europe and Asia/Rest of the Worldwent up 14%, 14% and 29%, respectively, on a year-over-year basis.

Operating Results

Gross margin was 58.6%, expanding 90 bps year over year.

Research & development (R&D) expenses were $39.3 million, up 14.2% from the year-ago quarter. Selling, general & administrative (SG&A) expenses increased 11.6% year over year to $221.7 million.

As a percentage of sales, R&D expenses contracted 40 bps year over year to 4.9%. Further, SG&A expenses contracted 300 bps year over year to 27.6%.

Adjusted operating margin was 26.2%, which expanded 440 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2021, the company’s cash and cash equivalent balance was $106.6 million, up from $95.2 million on Dec 31, 2020.

Long-term debt was $1.6 billion at the end of the first quarter, increasing from $1.3 billion at the end of thefourth quarter.

Mettler-Toledo generated $158.9 million of cash from operating activities in the reported quarter, down from $250.9million in the previous quarter. Free cash flow was $138.9 million in the reported quarter.

Guidance

For second-quarter 2021, Mettler-Toledo anticipates year-over-year sales growth between 19% and 21% in local currency. The Zacks Consensus Estimate for sales is pegged at $798.4 million.

Adjusted second-quarter earnings are anticipated to be $7.50-$7.65 per share, implying a 42%-45% rise from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at $6.37 per share.

For 2021, the company anticipates year-over-year sales growth of 10-12% in local currency. The Zacks Consensus Estimate for sales is pegged at $3.38 billion.

Adjusted 2021 earnings are anticipated to be $31.45-$31.90 per share, suggesting year-over-year growth of 22-24%. The Zacks Consensus Estimate for the same is pegged at $29.76 per share.

Zacks Rank & Stocks to Consider

Mettler-Toledo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector worth consideration are Agilent Technologies (NYSE:A) A, Pure Storage (NYSE:PSTG) PSTG and NVIDIA NVDA. All the stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank(Strong Buy) stocks here.

Long-term earnings growth rate of Pure Storage, NVIDIA and Agilent, is pegged at 52.21%, 15.05% and 9%, respectively.

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