Roper Technologies, Inc. (ROP - Analyst Report),formerly Roper Industries, Inc., reported first-quarter 2015 adjusted earnings of $1.55 per share which rose 6% year over year and beat the Zacks Consensus Estimate of $1.52 backed by growth across all revenue segments.

Quarter Details

Adjusted revenues increased 4% year over year to $867 million but missed the Zacks Consensus Estimate of $873 million. The year-over-year growth in revenues was driven by better-than-expected sales at Medical & Scientific Imaging and RF Technology.

Net orders rose 0.3% year over year to $848.7 million.

Segment Revenue Details

Revenues from Industrial Technology decreased 3.2% year over year to $190.7 million.

Revenues from Energy Systems & Controls declined 9.8% year over year to $139.9 million.

Revenues from Medical & Scientific Imaging increased 13.9% year over year to $291.7 million.

Revenues from RF Technology went up 7.7% from the year-ago quarter to $243 million.

Margin

Quarterly adjusted operating profit increased 11.4% year over year to $248.8 million. Selling, general and administrative expenses increased 2.2% year over year to $271.3 million. Adjusted operating margin expanded 190 basis points to 28.7% from the year-ago quarter.

Balance Sheet

Roper Technologies ended the quarter with $615.5 million in cash and equivalents compared with $502.9 million a year ago. Long-term debt amounted to $2.6 billion compared with $2.2 billion at the end of 2014. The company generated operating cash flow of $260 million and free cash flow of $250 million in the first quarter.

Guidance

For the second quarter of 2015, Roper Technologies expects adjusted earnings per share in the range of $1.59–$1.64. For 2015, the company expects adjusted earnings in the range of $6.70–$6.94.

Recommendation

We believe that a strong backlog coupled with robust organic growth will drive earnings, going forward. Moreover, accretive acquisitions will expand the company’s product portfolio, giving it a competitive advantage.

However, macroeconomic concerns, integration issues due to acquisitions and competition from Danaher Corp. (DHR - Analyst Report), Dover Corp. (DOV - Analyst Report) and Ingersoll-Rand PLC (IR - Analyst Report) are significant headwinds. The company’s high debt level is also a nagging concern.

Currently, Roper has a Zacks Rank #3 (Hold).