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November 11, 2010
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ESCO Technologies Inc.’s (ESE) fiscal fourth quarter 2010 earnings of 89 cents per share surpassed the Zacks Consensus Estimate of 79 cents per share and the year-ago earnings of 82 cents.
The fiscal year 2010 earnings of $1.68 per share also beat the Zacks Consensus Estimate of $1.58 per share.
Quarterly Performance
Net sales of $207.9 million not only beat the Zacks Estimate of $190.0 million, it also beat the prior year quarter sales by $38.5 million. The increase in sales was positively impacted by Aclara’s strong COOP deliveries and strong international sales.
The fiscal year 2010 sales were $607.5 million. Zacks Consensus estimated the fiscal year 2010 sales to be $590 million.
Gross profit increased 21.3% from the year-ago quarter to $84.4 million. However, gross margins decreased from 41.2% to 40.8%.
The EBIT margins of Filtration, Test and Utility Solutions group were 20.6%, 13.2% and 25.7%, respectively.
During the quarter the company had entered orders of $161.8 million, thereby projecting a record fiscal year 2010 order of $668.8 million.
As on September 30, 2010 backlog of the company was $360.6 million.
During the quarter net cash provided by operations was $51.1 million
Dividend
The company declared a cash dividend of 8 cents per share which will be paid on January 20, 2011 to stockholders of record on January 6, 2011.
Guidance
Management expects sales for the fiscal year 2011 to increase in the range of 10% to 15% in comparison to fiscal year 2010. It also expects incremental investments included in SG&A within the USG segment to be higher by $10 million in comparison with fiscal year 2010.
The company expects GAAP earnings per share to increase by 10% to 15% during the fiscal year 2011.
For fiscal year 2011 the company expects effective tax rate to be approximately 37.0%.
In Conclusion
Estimates for the quarter had been trending up in the run-up to the earnings release, with one analyst raising the estimates in the last 30 days. The full-year estimate for next year has been stable in recent days. The Zacks Consensus Estimate for 2011 is $1.86 per share.
We currently have a Zacks # 3 rank for ESCO Technologies which translates to a Hold rating in the short term.
Read the full analyst report on "ESE"
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