For filtration equipment manufacturer Pall (PLL), a stronger economy means more demand for its filters, purifiers, and other solutions. In the third quarter of the company's fiscal 2011, sales hit $709.8 million, a 15.2 percent gain over the same period last year.
Quarterly income came to $71.1 million, or 60 cents per share, up slightly from $69.7 million, or 58 cents per share, in the third quarter of 2010. Restructuring costs did eat into net profits during the quarter, but executives are happy with the top line.
"Fiscal 2011 sales have increased by double digits throughout the year," says company President and CEO Eric Krasnoff. Sales in the life sciences and industrial sectors were particularly strong, Krasnoff adds.
Ratings agencies applaud the company for its solid financials and expect business to improve as the economy strengthens. Moody's, for example, has given the company a stable outlook thanks to its solid financials.
"The stable outlook reflects our expectation that Pall's strong business profile should enable it to maintain or improve its robust cash flow metrics and coverage levels as global economic conditions strengthen."
Zacks Investment Research says investors should buy now, as revenues are beating expectations. "Pall Corporation reported better than expected results for its fiscal third quarter on June 8," its analysts write. "With strong earnings momentum, a rising dividend and reasonable valuation, Pall Corporation continues to look attractive."
M&A heats up
Expect acquisitions to bolster company financials in the future.
Pall has agreed to acquire its long-time Brazilian distribution partner, Engefiltro, as part of plans to expand in the Latin American market. Terms were not disclosed.
"Brazil is already the world’s seventh-largest economy and among the fastest growing. Its current size, market diversity and growth plans demand a local Pall presence,” Krasnoff says in a separate statement.
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