Mettler-Toledo Has a Slight Profit Decline

An after-tax restructuring charge mars earnings.
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On Feb. 5, 2009,

Mettler-Toledo

(MTD) - Get Report

reported a marginal decline in its Q4 FY08 earnings, hurt by after-tax restructuring charge of $4.70 million, or $0.14 per share. Net profit for the latest fourth declined to $62.92 million from $63.27 million. However, EPS improved to $1.84 per share from $1.72 per share on lower share count. Excluding one-time charges, earnings grew 15.6% to $2.00 per share from $1.73 per share, which topped the consensus estimate of $1.89 per share.

Net sales declined 4.3% to $509.69 million from $532.84 million a year ago, negatively hurt by 5.0% exchange rates. Geographically, local currency sales increased 1.0% in Europe and 6.0% in Asia & Rest of World and declined 3.0% in the Americas.

Mettler-Toledo initiated a cost-reduction program, which includes a workforce reduction of about 600 people or 5.0% of its total and other cost-containment measures. As a result, the company will record pretax restructuring charges, consisting principally of severance-related costs, of approximately $15.00 million to $20.00 million of which $6.40 million was recorded in Q4 FY08. The remaining amount will be substantially recognized in early 2009. The program is expected to reduce operating costs by more than $40.00 million annually.

For FY08, net earnings soared 13.6% to $202.78 million or $5.79 per share from $178.51 million or $4.70 per share in FY07. Adjusted earnings rose 23.2% to $5.84 per share from $4.74 per share. Annual net sales increased 10.0% to $1.97 billion from $1.79 billion in the preceding year.

Looking forward, Mettler-Toledo expects its Q1 FY09 local currency sales to decline by 6.0% to 8.0% and adjusted EPS in the range of $0.80 to $0.90, a decline of 11.0% to 21.0%. For FY09, MTD forecasts adjusted EPS in the range of $4.80 to $5.30 on local currency sales growth in the range of negative 4.0% to negative 8.0%.

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