Roper Industries (ROP) beat fourth-quarter EPS estimates by 15.7%, management guided higher for 2010.
This Zacks Rank #2 stock has a dividend yield of 0.7% and an expected long-term EPS growth rate of 12.8%.
Company Description
Roper Industries is a diversified growth company with annual revenues of more than $2 billion. The company provides engineered products and solutions for global niche markets, including water, energy, radio frequency, and research/medical applications.
Fourth-Quarter Results
Sales in the fourth quarter were $554 million, a 4% decrease from the same period in 2008. Orders were $565 million, an increase of 1% over the fourth quarter of the prior year–marking the first time since the third quarter of 2008 that orders exceeded the prior year.
The company had adjusted earnings per share of $0.81, 11 cents ahead of the Zacks Consensus Estimate.
Management indicated that it continued to see improvement in order trends across all business segments.
Roper Industries expects full-year 2010 adjusted EPS to be between $2.83 and $3.03 with operating cash flow between $375 million and $400 million. For the first quarter, it expects adjusted EPS of $0.62-$0.65. The company’s guidance excludes future acquisitions.
EPS Estimates Climbing Higher
In the last 60 days, the Zacks Consensus Estimate for 2010 is up 18 cents, or 6.4%, to $3.00, and consensus estimates for 2011 are up 23 cents, or 7.1%, to $3.45.
Those estimates translate to EPS growth of 11.3% in 2010 and 14.8% in 2011.
We note that Roper Industries has beaten the Zacks Consensus Estimate in four of the last five quarters. Those EPS beats have averaged 7.6%.
Acquisition Strategy
Acquisitions remain a consistent theme for Roper Industries.
Going forward, the company expects to see an more potential acquisitions. Roper is targeting cash accretive businesses with low capital requirements that either complement its current businesses or serve as a platform to enter new markets.
