Roper Technologies’ ROP fourth-quarter 2022 adjusted earnings of $3.92 per share surpassed the Zacks Consensus Estimate of $3.77. This compares with our estimate of $3.72. On a year-over-year basis, earnings increased 16.7%.
Roper’s net revenues of $1,430.9 million beat the Zacks Consensus Estimate of $1,418 million. This compares with our estimate of $1,345.3. The top line increased 13.9% year over year. Organic sales in the quarter increased 7%, owing to strength across each of the three segments. Acquisitions/divestitures boosted sales by 8%. However, movement in foreign currency translation had an adverse impact of 2%.
Roper has divested its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. Beginning the second quarter of 2022, the company started reporting under three segments namely — Application Software, Network Software and Technology Enabled Products.
Application Software’s revenues totaled $739.8 million, representing 51.7% of the quarter’s top line. This compares with the Zacks Consensus Estimate of $648 million. Our estimate for the quarter was $648.2 million. On a year-over-year basis, the segment’s revenues increased 22.2%. Organic sales in the quarter increased 7%.
Network Software & Systems generated revenues of $350.5 million, accounting for 24.5% of fourth-quarter revenues. This compares with the Zacks Consensus Estimate of $350 million. Our estimate for the quarter was $349.7 million. Segmental revenues grew 8.7% year over year. Organic sales in the quarter increased 9%.
Technology Enabled Products generated revenues of $340.6 million, accounting for 24.1% of the quarter’s revenues. This compares with the Zacks Consensus Estimate of $347 million. Our estimate for the quarter was $347.4 million. Sales were up 4% year over year. Organic sales in the quarter grew 5%.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
In the reported quarter, Roper’s cost of sales increased 13.9% year over year to $428.6 million. The cost of sales was 30% of the quarter’s net sales. Gross profit in the quarter grew 13.9% to $1,002 million, while gross margin decreased to 70% from 70.1% in the year-ago quarter.
Selling, general and administrative expenses increased 12.2% to $589.8 million. The same represented 41.2% of net sales in the reported quarter. Adjusted EBITDA was $592 million, reflecting year-over-year growth of 17%. The margin increased 110 basis points to 41.4%. Interest expenses fell 3.6% year over year to $54 million.
Balance Sheet & Cash Flow
Exiting fourth-quarter 2022, Roper had cash and cash equivalents of $792.8 million compared with $351.5 million at the end of December 2021. Long-term debt (net of current portion) decreased to $699.2 million from $799.2 million at the end of the year-ago period. In 2022, ROP’s repayment under the revolving line of credit was $470.0 million.
Roper generated net cash of $734.6 million from operating activities in the twelve months of 2022, reflecting a decline of 63.5% from the year-ago level. Capital expenditure totaled $40.1 million, compared with $28.5 million in the year-ago quarter.
In the twelve months of 2022, ROP rewarded its shareholders with a dividend payment of $262.3 million, up 11% year over year.
For 2023, ROP predicts adjusted earnings per share from continuing operations of $15.90- $16.20. Organic growth from continuing operations is expected to be 5-6% in 2023.
For the first quarter, Roper anticipates earnings per share of $3.80-$3.84.
Zacks Rank & Other Stocks to Consider
ROP currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies from the Industrial Products sector are discussed below:
Allegion plc ALLE presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 8.6% in the past six months.
Valmont Industries, Inc. VMI presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 22.2% in the past six months.
IDEX Corporation IEX presently has a Zacks Rank of 2. IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 0.1% for 2022. The stock has rallied 13.6% in the past six months.
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