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Fortive (FTV) Q1 Earnings Beat Estimates, Revenues Up Y/Y

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Fortive FTV reported first-quarter 2021 earnings of 63 cents per share, which outpaced the Zacks Consensus Estimate by 6.8% and increased 37% year over year.

Sales increased 13.6% year over year to $1.26 billion and beat the consensus mark by 2.9%.

Quarter Detail

Intelligent Operating Solutions segment generated revenues of $510.9 million (accounting for 40.6% of total first-quarter revenues), which increased 9.5% on a year-over-year basis.

Precision Technologies segment generated revenues of $447.4 million (35.5% of total revenues), which increased 14.3% year over year.

Fortive Corporation Price, Consensus and EPS Surprise

Fortive Corporation Price, Consensus and EPS Surprise
Fortive Corporation Price, Consensus and EPS Surprise

Fortive Corporation price-consensus-eps-surprise-chart | Fortive Corporation Quote

Advanced Healthcare Solutions segment generated revenues of $300.9 million (23.9% of total revenues), which increased 20.3% year over year.

Gross margin came in at 56.5%, which expanded 130 basis points (bps) year over year.

Selling, General and Administrative (SG&A) expenses were $428.1 million, reflecting a 3% year-over-year increase. As a percentage of revenues, SG&A expenses decreased 350 bps year over year.

Research and development (R&D) expenses were $86.2 million, up 6.7% year over year. As a percentage of revenues, R&D expenses decreased 40 bps year over year.

Operating margin was 15.7%, which expanded 530 bps on a year-over-year basis.

Segment wise, operating margin from Intelligent Operating Solutions came in at 21.2%, which expanded 380 bps year over year. Precision Technologies operating margin came in at 21.4%, up 270 bps on a year-over-year.

Advanced Healthcare Solutions’ operating income was $18.9 million against loss of $15.8 million in the year-ago quarter.

Free Cash Flow

Fortive reported free cash flow of $144 million, up 50% year over year in first-quarter 2021.

Guidance

For the second quarter of 2021, Fortive expects adjusted net earnings in the range of 56-60 cents per share. The Zacks Consensus Estimate for the quarter is pegged at 59 cents per share.

Core growth is expected between 16-19%. Adjusted operating profit is expected between roughly 19.5% and 20.5%.

For 2021, Fortive expects adjusted net earnings in the range of $2.50-$2.60 per share. The consensus mark for the same is pegged at $2.75 per share.

Core growth is expected between 7-10%, driven by continued strong momentum across core industrial end markets. Moreover, volume improvement of elective procedure is expected to drive Advanced Healthcare Solutions’ top-line growth.

Adjusted operating profit is expected between roughly 22% and 23%.

Zacks Rank & Other Stocks to Consider

Fortive currently has a Zacks Rank #2 (Buy).

Similar-ranked stocks in the broader technology sector are CDW Corporation CDW, Cognex CGNX and EPAM Systems EPAM. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CDW is set to report quarterly earnings on May 5. Both Cognex and EPAM are scheduled to report the same on May 6.

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Fortive Corporation (FTV) : Free Stock Analysis Report

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