ESCO Technologies (NYSE:ESE) Shares Gap Down on Disappointing Earnings

Key Points

• ESCO Technologies experienced a significant drop in share price, opening at $174.93 after a previous close of $189.87, due to weaker than expected earnings.
• The company reported $1.60 earnings per share, missing analyst expectations of $1.65 EPS, and had a total revenue of $296.34 million, below forecasts of $320.23 million.
• Despite the earnings miss, Benchmark raised its price target on ESCO Technologies from $190.00 to $200.00 and maintained a "buy" rating for the stock.

ESCO Technologies Inc. (NYSE:ESE - Get Free Report) shares gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $189.87, but opened at $174.93. ESCO Technologies shares last traded at $189.69, with a volume of 61,459 shares changing hands.

The scientific and technical instruments company reported $1.60 earnings per share for the quarter, missing analysts' consensus estimates of $1.65 by ($0.05). ESCO Technologies had a net margin of 10.37% and a return on equity of 11.19%. The company had revenue of $296.34 million during the quarter, compared to analysts' expectations of $320.23 million. During the same period last year, the firm earned $1.16 earnings per share. ESCO Technologies's revenue was up 13.6% on a year-over-year basis.

ESCO Technologies Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, October 16th. Stockholders of record on Thursday, October 2nd will be paid a dividend of $0.08 per share. This represents a $0.32 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date is Thursday, October 2nd. ESCO Technologies's payout ratio is 7.21%.

Analysts Set New Price Targets

ESE has been the topic of a number of recent analyst reports. Benchmark boosted their price target on shares of ESCO Technologies from $190.00 to $200.00 and gave the stock a "buy" rating in a research note on Friday, May 9th. Wall Street Zen lowered shares of ESCO Technologies from a "buy" rating to a "hold" rating in a research note on Saturday.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Rhumbline Advisers grew its position in ESCO Technologies by 1.4% during the second quarter. Rhumbline Advisers now owns 73,853 shares of the scientific and technical instruments company's stock worth $14,170,000 after buying an additional 1,011 shares during the period. AXQ Capital LP purchased a new stake in shares of ESCO Technologies in the second quarter valued at about $253,000. Franklin Resources Inc. lifted its holdings in shares of ESCO Technologies by 19.8% in the second quarter. Franklin Resources Inc. now owns 22,103 shares of the scientific and technical instruments company's stock valued at $4,241,000 after purchasing an additional 3,660 shares in the last quarter. Legal & General Group Plc lifted its holdings in shares of ESCO Technologies by 2.1% in the second quarter. Legal & General Group Plc now owns 72,430 shares of the scientific and technical instruments company's stock valued at $13,897,000 after purchasing an additional 1,457 shares in the last quarter. Finally, Hillsdale Investment Management Inc. lifted its holdings in shares of ESCO Technologies by 26.5% in the second quarter. Hillsdale Investment Management Inc. now owns 33,845 shares of the scientific and technical instruments company's stock valued at $6,494,000 after purchasing an additional 7,100 shares in the last quarter. 95.70% of the stock is currently owned by institutional investors and hedge funds.

ESCO Technologies Stock Up 2.6%

The company has a market cap of $5.14 billion, a PE ratio of 44.74 and a beta of 1.23. The company has a quick ratio of 1.04, a current ratio of 1.52 and a debt-to-equity ratio of 0.38. The firm's fifty day simple moving average is $189.64 and its 200-day simple moving average is $170.15.

About ESCO Technologies

ESCO Technologies Inc produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through three segments: Aerospace & Defense, Utility Solutions Group, and RF Test & Measurement. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines.