U.S. Markets open in 4 hrs 45 mins

Pentair (PNR) Beats on Q3 Earnings While Sales Lag

Zacks Equity Research

Pentair Plc PNR is a global water, fluid, thermal management, and equipment protection partner with industry leading products, services, and solutions. It has a market capitalization of $10.67 billion.

Pentair continues to aggressively manage its cost structure and drive productivity to work through the near-term challenges. The company is also investing in its high-performing Technical Solutions and Water Quality Systems segments where it sees strategic organic and inorganic growth opportunities. Pentair’s acquisition of ERICO is expected to deliver full-year synergies of over $10 million and accretive to Pentair’s 2016 earnings. The acquisition will also strengthen Pentair's business by broadening its product offering. However, Pentair experienced fall in project orders in both industrial and energy businesses in the first half of 2016 and anticipates these headwinds to continue. Volatile raw material prices and stronger dollar will remain headwinds.

Investors have thus been eagerly waiting to see how the company fares in its third quarter earnings results. Let’s have a quick look at the earnings release of this diversified industrial manufacturing company.

Estimate Trend & Surprise History: The investors should note that the earnings estimate for Pentair for the third quarter has moved south over the past month. The Zacks Consensus Estimate is currently pegged at 73 cents, moving 32% down over the said timeframe.

As regards earnings surprise, Pentair has outpaced the Zacks Consensus Estimate in the past 4 quarters, with an average beat of 4.58%.

PENTAIR PLC Price and EPS Surprise

PENTAIR PLC Price and EPS Surprise | PENTAIR PLC Quote

Earnings: Pentair beat the Zacks Consensus Estimate by 7%. Analysts polled by Zacks were expecting earnings per share (EPS) of 73 cents and the company reported adjusted EPS of 78 cents.

Revenue: Pentair however missed on revenues. It reported third quarter revenues of $1.211 billion, falling short of the Zacks Consensus Estimate of $1.246 billion.

Key Developments to Note: Pentair expects adjusted earnings per share to be around $3.00 in 2016. Fiscal 2016 sales is projected at $4.9 billion, up approximately 7% year over year on a reported basis but down 1% on a core basis.

Pentair also initiated its fourth quarter 2016 guidance. The company expects adjusted EPS in the range of 73 cents on the back of revenues of approximately $1.22 billion. Earnings is expected to decline 17% on a year over year basis.  Projected revenues for the quarter reflect a  6% decline on a reported basis and 6% down on a core basis compared to the prior year quarter.

Zacks Rank: Currently, Pentair carries a Zacks Rank #4 (Sell). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change.

Market Reaction: Shares remained flat in pre-market trading following the release, at the time of this write-up.

Check back later for our full write up on this Pentair earnings report later!

Confidential from Zacks

Beyond this Tale of the Tape, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PENTAIR PLC (PNR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research