Why did reported EPS increase while Adjusted EPS declined in the second quarter?

Reported diluted EPS of $10.37 included a one-time non-cash tax benefit of $1.07 per share, which is excluded from Adjusted EPS. Adjusted EPS of $9.65 fell 5% from $10.19 in the prior-year quarter, reflecting weaker operating results.

How did sales perform by region?

In Q2 2024, reported sales increased 5% in Europe and 2% in the Americas, and declined 16% in Asia/Rest of World. On a local currency basis, sales rose 6% in Europe and 2% in the Americas and fell 12% in Asia/Rest of World. The company attributed weakness in China to soft market conditions.

What is management's outlook for the rest of 2024?

Management expects third-quarter local currency sales to grow approximately 1% and full-year local currency sales to grow approximately 2%. Full-year Adjusted EPS is forecast at $40.20 to $40.50, representing growth of approximately 6% to 8%, and includes an estimated 2% currency headwind. The company notes that market conditions are uncertain and could change quickly.

What did management say about the first-quarter benefit to sales?

Year-to-date local currency sales of down 1% included a first-quarter benefit from delayed fourth-quarter 2023 shipments. Excluding that benefit, year-to-date local currency sales declined 4%, with flat sales in Europe and the Americas and a 12% decline in Asia/Rest of World.

Are the non-GAAP measures comparable to GAAP results?

The filing presents Adjusted EPS, Adjusted Operating Profit, Adjusted Free Cash Flow and Local Currency Sales Growth as supplemental measures and reconciles them to U.S. GAAP figures. It cautions that these measures are not standardized, may not be comparable to other companies' measures, and should not be relied on to the exclusion of GAAP results. The company does not provide GAAP forward-looking figures because it cannot predict the timing and amount of restructuring and other non-recurring items with reasonable certainty.

MTD 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.

Mettler-Toledo International Inc. furnished its press release reporting results for the three and six months ended June 30, 2024 under Item 2.02 of this Form 8-K.

For the second quarter, reported net sales declined 4% to $946.8 million^a, with local currency sales down 2% as currency reduced sales growth by 2%. Diluted EPS as reported was $10.37, compared with $9.69 a year earlier, and included a one-time non-cash tax benefit of $1.07 per share. Adjusted EPS was $9.65, a decrease of 5% from $10.19, and Adjusted Operating Profit was $284.1 million versus $307.7 million.

Earnings before taxes were $243.2 million^b, compared with $263.4 million. For the first half of 2024, reported sales declined 2% to $1.873 billion and local currency sales declined 1%. Diluted EPS was $18.60 versus $18.15, and Adjusted EPS was $18.53, down 2% from $18.82.

By region, local currency sales increased 6% in Europe and 2% in the Americas, while Asia/Rest of World declined 11% for the six months. Excluding the first-quarter benefit from delayed fourth-quarter 2023 shipments, year-to-date local currency sales declined 4%. Management's outlook calls for third-quarter 2024 local currency sales growth of approximately 1% and Adjusted EPS of $9.90 to $10.05^c, representing growth of 1% to 3%.

For full-year 2024, it anticipates local currency sales growth of approximately 2% and Adjusted EPS of $40.20 to $40.50^d, representing growth of approximately 6% to 8%. This compares with prior full-year Adjusted EPS guidance of $39.90 to $40.40. Management cites continued softness in China as a key headwind.

02—Key points

Key Highlights

Q2 2024 reported net sales fell 4% to $946.8 million; local currency sales declined 2%, with currency reducing sales growth by 2%.
Q2 2024 diluted EPS rose to $10.37 from $9.69, but included a one-time non-cash tax benefit of $1.07 per share; Adjusted EPS declined 5% to $9.65 from $10.19.
Adjusted Operating Profit decreased to $284.1 million from $307.7 million in Q2 2024, with the adjusted operating margin at 30.0% versus 31.3% in the prior-year period.
Asia/Rest of World sales declined 16% in reported terms in Q2 2024, while Europe rose 5% and the Americas rose 2%.
Six-month 2024 reported sales declined 2% to $1.873 billion; Adjusted EPS fell 2% to $18.53 from $18.82.
Full-year 2024 guidance: local currency sales growth of approximately 2% and Adjusted EPS of $40.20 to $40.50, up from prior guidance of $39.90 to $40.40.
Third-quarter 2024 guidance: local currency sales growth of approximately 1% and Adjusted EPS of $9.90 to $10.05, including an estimated 1% currency headwind.

03—Questions

Frequently Asked Questions

Why did reported EPS increase while Adjusted EPS declined in the second quarter?
Reported diluted EPS of $10.37 included a one-time non-cash tax benefit of $1.07 per share, which is excluded from Adjusted EPS. Adjusted EPS of $9.65 fell 5% from $10.19 in the prior-year quarter, reflecting weaker operating results.
How did sales perform by region?
In Q2 2024, reported sales increased 5% in Europe and 2% in the Americas, and declined 16% in Asia/Rest of World. On a local currency basis, sales rose 6% in Europe and 2% in the Americas and fell 12% in Asia/Rest of World. The company attributed weakness in China to soft market conditions.
What is management's outlook for the rest of 2024?
Management expects third-quarter local currency sales to grow approximately 1% and full-year local currency sales to grow approximately 2%. Full-year Adjusted EPS is forecast at $40.20 to $40.50, representing growth of approximately 6% to 8%, and includes an estimated 2% currency headwind. The company notes that market conditions are uncertain and could change quickly.
What did management say about the first-quarter benefit to sales?
Year-to-date local currency sales of down 1% included a first-quarter benefit from delayed fourth-quarter 2023 shipments. Excluding that benefit, year-to-date local currency sales declined 4%, with flat sales in Europe and the Americas and a 12% decline in Asia/Rest of World.
Are the non-GAAP measures comparable to GAAP results?
The filing presents Adjusted EPS, Adjusted Operating Profit, Adjusted Free Cash Flow and Local Currency Sales Growth as supplemental measures and reconciles them to U.S. GAAP figures. It cautions that these measures are not standardized, may not be comparable to other companies' measures, and should not be relied on to the exclusion of GAAP results. The company does not provide GAAP forward-looking figures because it cannot predict the timing and amount of restructuring and other non-recurring items with reasonable certainty.

04—Continue

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