Mettler-Toledo (MTD) Q3 Earnings & Sales Beat, Increase Y/Y

Mettler-Toledo International, Inc. MTD reported third-quarter 2022 adjusted earnings of $10.18 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line also improved 17% on a year-over-year basis.

Net sales of $985.8 million were up 4% on a reported basis and 10% on a currency-neutral basis from the year-ago quarter’s respective readings. The figure surpassed the Zacks Consensus Estimate of $974.9 million.

Solid momentum across the Laboratory and Industrial segments in the reported quarter drove the top line. Also, improving food retail business remained a positive. The strong performance delivered across the Americas and Asia/Rest of the World contributed well.

Headwinds related to the pandemic, supply-chain disruptions, inflationary pressure, uncertainties due to the Russia-Ukraine war and foreign exchange headwinds remain a concern for MTD in the days ahead.

Mettler-Toledo has lost 27.7% on a year-to-date basis compared with the industry’s decline of 27.9%

Nevertheless, 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

MettlerToledo International, Inc. Price, Consensus and EPS Surprise

MettlerToledo International, Inc. price-consensus-eps-surprise-chart | MettlerToledo International, Inc. Quote

Top Line in Detail

By Segments: MTD reports revenues under three segments, namely Laboratory Instruments, Industrial Instruments and Food Retail, which accounted for 56%, 39% and 5% of net sales in the third quarter, respectively. The Laboratory, Industrial and Food Retail segments witnessed year-over-year improvements of 10%, 10% and 7%, respectively, in the quarter under review.

By Geography: Total sales from the Americas, Europe and Asia/Rest of the World contributed 41%, 23% and 35% to net sales in the third quarter, respectively. Sales in the Americas, Europe and Asia/Rest of the World went up 11%, 1% and 15%, respectively, on a year-over-year basis.

Operating Results

The gross margin was 59.3%, expanding 90 basis points (bps) year over year.

Research & development (R&D) expenses were $44.1 million, up 4.4% from the year-ago quarter’s tally. Selling, general & administrative (SG&A) expenses decreased 3.1% year over year to $233.4 million.

As a percentage of sales, R&D expenses expanded 10 bps year over year to 4.5%. SG&A expenses contracted 160 bps year over year to 23.7%.

The adjusted operating margin was 31.2%, which expanded 250 bps from the prior-year quarter’s level.

Balance Sheet & Cash Flow

As of Sep 30, 2022, Mettler-Toledo’s cash and cash equivalent balance was $122.1 million, up from $109.4 million as of Jun 30, 2022.

Long-term debt was $1.825 billion at the end of the third quarter compared with $1.821 billion at the end of the second quarter.

Mettler-Toledo generated $245.4 million cash from operating activities in the reported quarter, up from $219.2 million in the previous quarter. Free cash flow was $224.7 million in the reported quarter.

Guidance

For fourth-quarter 2022, Mettler-Toledo projects sales growth of 7% in local currency from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for sales is pegged at $1.08 billion.

Adjusted fourth-quarter earnings are anticipated to be $11.55-$11.65 per share, implying a 10-11% rise from the year-ago quarter’s reported number, which includes a foreign-currency headwind of 10%. The Zacks Consensus Estimate for earnings is pegged at $11.97 per share.

For 2022, Mettler-Toledo expects sales growth in local currency at 10% from the year-earlier tally. The Zacks Consensus Estimate for the same is pegged at $3.93 billion.

Mettler-Toledo revised the guidance for adjusted 2022 earnings by hiking the lower end. It is now expected within $38.95-$39.05 per share, suggesting growth of 15% from the year-ago reported number. The Zacks Consensus Estimate for the same is pegged at $38.98. Previously, management had anticipated adjusted EPS within $38.85-$39.05.

Zacks Rank & Stocks to Consider

Currently, Mettler-Toledo has a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like US Foods USFD, The Trade Desk TTD and Tencent Music Entertainment Group TME, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

US Foods is set to report third-quarter 2022 results on Nov 10. The Zacks Consensus Estimate for USFD’s earnings is pegged at 59 cents per share, suggesting an increase of 22.9% from the prior-year period’s reported figure. USFD has lost 17.4% in the year-to-date period. Its long-term earnings growth rate is currently projected at 20%.

The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 46.3% in the year-to-date period. TTD’s long-term earnings growth rate is currently projected at 24%.

Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting an increase of 22.2% from the prior-year quarter’s reported figure. TME has lost 44.7% in the year-to-date period. TME’s long-term earnings growth rate is currently projected at 17.9%.

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