Pall Corporation (PLL) reported fourth quarter 2009 revenues of $652 million and net earnings of $69.5 million. Earnings per share were 58 cents, ahead of the Zacks Consensus Estimates of 52 cents.
Life Sciences sales grew 5.2% year over year in the quarter and 3% for the year. Pall‘s Industrial sales declined 8.8% in the quarter and 7.3% for the year. This was the first quarter in the previous twelve months that Microelectronics sales grew, turning in almost 40% sequential growth. This market led the overall sequential increase in Pall sales. Municipal Water, Power Generation and Military markets all showed double-digit growth in the quarter and for the year.
Medical sales increased 1.6% in the quarter driven, in part, by strong growth of Pall-Aquasafe water filters to hospitals. BioPharmaceuticals sales increased 7.8% in the quarter with sales growing in all geographies. The vaccine and plasma derivatives markets were particularly strong. Life Sciences gross margin increased 70 basis points to 52.2%. SG&A as a percentage of sales decreased 120 basis points to 25.7%. Operating profit improved to 22.1% for the quarter compared to 20.5% in the year-ago quarter.
Energy, Water & Process Technologies sales decreased 2.5% in the quarter. Municipal Water posted a 12.7% sales increase. Industrial Manufacturing markets continued to be weak globally. Aerospace & Transportation decreased 8.3% for the quarter. Military Aerospace sales increased 14.9% in the quarter on strong performance led by Europe. Commercial Aerospace declined 9.2% reflecting weakness in airline aftermarket sales and reduced airframe production, particularly in the small jet market. Fourth quarter Microelectronics sales decreased 31.7% over the prior year. Industrial gross margin was negatively impacted by product mix and reduced volume. Pricing and manufacturing improvements mitigated the decline. SG&A improved 4.6% in local currency as a result of cost reduction and efficiency programs. This resulted in a decrease in operating profit margin to 13.9% compared to 17.9% in the comparable quarter in the previous year.
Pall’s market and geographic diversity have moderated the impact of a challenging macroeconomic environment. It continues to grow earnings and increase cash flow. The company is steadily reducing costs while continuing to invest in strategic initiatives. Looking at fiscal 2010, it expects global economic activity to remain weak for at least the first half of the year and a slow recovery in the second half.
Pall Corporation solves complex contamination, separation, purification and detection problems for its diverse customer base around the world. These solutions enable customers to produce high quality innovative products, remove pathogens from blood fractions, water and food, purify biotech drugs, minimize waste, meet regulations and develop breakthrough technologies. We currently have a Neutral recommendation on the company.
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