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Oil and Gas Industry Haunts Roper Technologies’ 2Q16 Revenue

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Roper Technologies’ 2Q16 revenue at a glance

Roper Technologies’ (ROP) 2Q16 revenue was $934 million, nearly 2.1% below Market consensus of $954 million. Revenue for the quarter increased 4.7% due to acquisitions when compared to 2Q15.

But 2Q16 organic revenues declined 2.4%. In 2Q16, the revenues were impacted by the oil and gas segment, whose revenues were worse than expected.

The underperformance in the macro industrial segment, particularly in machinery and oil and gas equipment sales, led to sales erosion. ROP’s management expects oil and gas headwinds to continue in the second half of 2016. 

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Roper Technologies’ 1H16 revenues and guidance for 2016

In the first half of 2016, ROP’s revenues increased 4.5% to $1.83 billion compared to $1.75 billion in the first half of 2015. The increase in revenue came on the back of acquisitions. Management has given revenue guidance for the second half of 2016 at 7%–9%. Organic growth in revenues is expected to be 2%–4%.

ROP’s large-capitalization industrial (XLI) peers are General Electric (GE), Honeywell (HON), and Illinois Tool Works (ITW). GE’s 2Q16 revenue was $33.4 billion, nearly 5.3% above the Market consensus of $31.8 billion.

HON’s 2Q16 revenues were $9.9 billion, an increase of 2.0% when compared to $9.7 billion in 2Q15. The increase in revenues was primarily inorganic. ITW’s 2Q16 revenues were $3.4 billion, a marginal decline of 0.1% when compared to 2Q15. ITW’s organic sales growth was 2%.

On a year-over-year basis from July 27, 2015 to July 27, 2016, ROP rose 1.0%. The broad-based S&P 500 Index (SPY) rose 4.0%. On a year-to-date basis, ROP has fallen 11.0%.

In the next part, we’ll look at Roper Technologies’ segmental performance.

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