Mettler-Toledo (MTD) Q3 Earnings & Sales Beat, Increase Y/Y
Mettler-Toledo's (MTD) third-quarter 2021 results reflect benefits from robust Laboratory and Industrial product lines.
Mettler-Toledo International, Inc. MTD reported third-quarter 2021 adjusted earnings of $8.72 per share, which beat the Zacks Consensus Estimate by 5.7%. The bottom line also improved 24.2% on a year-over-year basis.
Net sales of $951.95 million were up 18% on a reported basis and 16% on a currency-neutral basis from the year-ago quarter’s respective levels. The figure surpassed the Zacks Consensus Estimate of $925 million.
Solid momentum across the Laboratory and Industrial segments in the reported quarter drove top-line growth. Strong performance delivered by the company across all geographies remained a major positive.
However, the company witnessed sluggishness in its Food Retail segment.
Headwinds related to the pandemic remain concerning for the company in the days ahead. However, portfolio strength, cost-cutting efforts, margin and productivity initiatives, and robust sales and marketing strategies are expected to remain tailwinds.
MettlerToledo International, Inc. Price, Consensus and EPS Surprise
Top Line in Detail
By Segments: The company reports under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 56%, 39% and 5% of the net sales in the third quarter, respectively. The Laboratory and Industrial segments witnessed year-over-year growth of 23% and 12%, respectively, in the quarter under review.
The Food Retail business was down 19% on a year-over-year basis.
By Geography: The company reports total sales from the Americas, Europe and Asia/Rest of the World. All the regions contributed 39%, 28% and 33% to net sales in the third quarter, respectively. Sales in the Americas, Europe and Asia/Rest of the World went up 21%, 15% and 23%, respectively, on a year-over-year basis.
Gross margin was 58.4%, expanding 20 basis points (bps) year over year.
Research & development (R&D) expenses were $42.3 million, up 21.9% from the year-ago quarter’s level. Selling, general & administrative (SG&A) expenses increased 17.4% year over year to $240.7 million.
As a percentage of sales, R&D expenses expanded 10 bps year over year to 4.4%. SG&A expenses contracted 10 bps year over year to 25.3%.
Adjusted operating margin was 28.7%, which expanded 20 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Sep 30, 2021, the company’s cash and cash equivalent balance was $183.7 million, up from $142.3 million as of Jun 30, 2021.
Long-term debt was $1.64 billion at the end of the third quarter, increasing from $1.60 billion at the end of the second quarter.
Mettler-Toledo generated $263.3 million in cash from operating activities in the reported quarter, up from $245.5 million in the previous quarter. Free cash flow was $243.05 million in the reported quarter.
For fourth-quarter 2021, Mettler-Toledo projects year-over-year sales growth of 8% in local currency. The Zacks Consensus Estimate for sales is pegged at $1.02 billion.
Adjusted fourth-quarter earnings are anticipated to be $10-$10.05 per share, implying an 8-9% rise from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at $9.96 per share.
For 2021, the company anticipates year-over-year sales growth of 17%. The Zacks Consensus Estimate for current-year sales is pegged at $3.67 billion.
Mettler-Toledo raised the guidance for adjusted 2021 earnings from $32.60-$32.90 per share to $37.25-$37.65. The Zacks Consensus Estimate for the same is pegged at $32.86 per share.
Zacks Rank & Stocks to Consider
Currently, Mettler-Toledo has a Zacks Rank #3 (Hold).
Other better-ranked stocks in the broader technology sector include Advanced Micro Devices AMD, PerkinElmer PKI and Mimecast Limited MIME. While Advanced Micro Devices sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Mimecast carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Advanced Micro Devices, PerkinElmer, and Mimecast are currently projected at 46.2%, 41.7%, and 35%, respectively.
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