Spirax-Sarco Engineering (LON:SPX) Releases Earnings Results

Spirax-Sarco Engineering (LON:SPX) released its quarterly earnings data on Tuesday. The company reported GBX 150 EPS for the quarter, Digital Look Earnings reports. Spirax-Sarco Engineering had a return on equity of 13.86% and a net margin of 9.60%.

Here are the key takeaways from Spirax-Sarco Engineering’s conference call:

• Spirax Group reaffirmed its full-year guidance after delivering 5% organic sales growth, 6% organic operating-profit growth, a 19.8% margin, and 9% EPS growth in the first half—well ahead of industrial production growth.
• The group entered the second half with strong order momentum and healthy order books. STS expects higher second-half sales and margins, ETS anticipates high-single-digit growth, and Watson-Marlow is benefiting from Biopharm orders running ahead of sales.
• ETS was a standout performer, with 11% organic sales growth and a 220-basis-point margin improvement to 17.2%. Management remains confident in reaching the division’s 20% margin target, supported by operational efficiencies, favorable semiconductor and Heat Trace mix, and potential future pricing benefits.
• Management highlighted longer-term growth opportunities in digital connectivity, decarbonization, semiconductors, data centers, and healthcare. Connected steam traps, energy assessments, and Powering Zero projects are expanding the addressable market and creating potential follow-on revenue.
• The macroeconomic backdrop remains weak, with industrial-production forecasts repeatedly revised down and Germany still contracting. First-half cash conversion fell to 54% after precautionary inventory builds related to Middle East supply-chain risks, while net debt temporarily rose to £618 million, or 1.6x EBITDA.

Spirax-Sarco Engineering Stock Down 6.5%

SPX stock opened at GBX 7,155 on Tuesday. The business’s 50-day moving average price is GBX 6,895.38 and its 200-day moving average price is GBX 7,115.43. The stock has a market cap of £5.28 billion, a P/E ratio of 32.35, a PEG ratio of 2.20 and a beta of 1.14. The company has a quick ratio of 1.73, a current ratio of 1.85 and a debt-to-equity ratio of 83.78. Spirax-Sarco Engineering has a twelve month low of GBX 5,950 and a twelve month high of GBX 8,050.

Analyst Upgrades and Downgrades

Separately, UBS Group restated a “buy” rating and set a £105 target price on shares of Spirax-Sarco Engineering in a research note on Monday, May 11th. Three equities research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, Spirax-Sarco Engineering currently has an average rating of “Hold” and an average target price of GBX 8,012.50.

Spirax-Sarco Engineering Company Profile

Spirax Group is positioned to play a critical role in enabling the industrial transition to net zero, aligned to our Purpose to create sustainable value for all our stakeholders as we engineer a more efficient, safer and sustainable world. We put solving customers’ problems at the heart of our total solutions approach. Our global thermal energy and fluid technology solutions improve operating efficiency and safety in our customers’ critical industrial processes. Our new-to-world decarbonisation* solutions will use our proprietary technologies to electrify boilers for the raising of steam, as well as the electrification of other critical industrial process heating applications.