That doesn't necessarily lead to excellent results, however. The latest quarterly and full-year report was rather flat year over year, and both sales and earnings are slow to grow. Annual revenues rose by only 6% from the 2005 level, which is barely faster than the current inflation rate of about 4%. Pro forma net earnings increased by only 1.2%. You have to look a bit closer to find out what's ailing the company, though. Dig into the segment reports, and you'll see that the bread-and-butter general industrial filtration segment, which represents about 38% of total revenues for the fiscal year, brings in only about a quarter of the operating profits. It's also among the slowest-growing divisions.
Management does have a plan for reversing that trend, though. You'll recognize the concept from a golden oldie by Gillette, now a subsidiary of Procter & Gamble
With that in mind, we can see that gross margins, which have become the main focus for Pall's management team, should mean that it lets up on new-system sales for a while. Pall's margins are trailing those of competitors Millipore
Further filtered Foolish fun:
Fool contributor Anders Bylund is an Intuitive Surgical shareholder but holds no other position in any of the companies discussed here. He really should shave more often. You can check out Anders' holdingsif you like. Foolishdisclosure keeps us squeaky clean at all times.
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