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Roper Industries Inc. (ROP) is scheduled to announce its first quarter 2011 results before the market opens on April 26, 2011. Roper designs, manufactures and distributes specialty industrial controls, fluid handling and analytical instrumentation products worldwide.

The Zacks Consensus Estimate for the first quarter is pegged at 87 cents, up 33.8% year over year. Roper posted an average earnings surprise of 10.62% in the trailing four quarters, implying that it has outdone the Zacks Consensus Estimate by the same magnitude over the same period.

Fourth Quarter Recap

Roper reported strong fourth quarter 2010 results where earnings per share (EPS) of $1.10, surpassed the Zacks Consensus Estimate of 99 cents. The strong results were primarily driven by solid revenue growth and operating margin expansion in the quarter.

Fourth quarter revenues of $679.5 million were up 22.7% year over year and 12.3% sequentially. Revenues beat the Zacks Consensus Estimate of $663.0 million by 2.5%.

Acquisitions/Divestitures contributed 9.0% to the revenue growth in the quarter, while 15.0% came from organic growth. Foreign exchange had a negative impact of 1% on revenues. For further details please see "Roper Beats with Strong Top Line."

Estimate Revision Trend

Of the 13 analysts providing estimates for the second quarter, only one analyst made an upward revision, while none made a downward revision in the last 30 days.

In its fourth quarter earnings call, Roper announced that it expects EPS in the range of 83 cents to 87 cents for the first quarter of 2011. Currently, the estimates have moved up to a range of 85 cents to 92 cents based on the bullish outlook of the analysts toward the company.

Recommendation

We expect Roper to post strong earnings growth for the first quarter of 2011, based on strong revenue growth resulting from the record backlog of $785.0 million.

As a part of its growth strategy, Roper made numerous acquisitions and is likely to continue doing so in the future. With the help of numerous acquisitions that are low on investment but high in margins, Roper has been growing in the SaaS business. With a record backlog of $785.0 million, the company expects strong sales growth in 2011.

We remain Neutral over the long term (6-12 month). Currently, Roper has a Zacks #2 Rank, which implies a short-term Buy rating on the stock.

Source: Roper Industries Earnings Preview