Badger Meter (BMI) delivered disappointing first quarter results, as EPS declined 39% year over year to $0.22 and fell short of the Zacks Consensus Estimate at $0.43.
Net sales dropped 7.2% year over year to $57.4 million, compared to the Zacks Consensus Estimate of $69 million. The increased sales of manual meters were not enough to offset the dismal sale of automatic meters.
This resulted in decreased gross margins as manual meters have lower margins compared with the automatic meters. However, the long-term prospects of the company seem positive, mainly due to water conservation. We reiterate our Underperform recommendation on the stock with a target price of $33.00.
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