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Pentair (PNR) Earnings & Revenues Beat Estimates in Q2

Zacks Equity Research

Pentair plc PNR delivered second-quarter 2019 adjusted earnings per share (EPS) of 69 cents, which surpassed the Zacks Consensus Estimate of 66 cents and management’s guidance of 63-66 cents. However, the bottom line was down 3% from prior-year quarter owing to the impact of weather.

Including one-time items, the company reported earnings of 68 cents per share compared with the year-ago quarter’s figure of 44 cents.

Net sales rose 2.4% year over year to $800 million. The figure outpaced the Zacks Consensus Estimate of $791 million. Excluding the impact of acquisitions, divestitures and currency translation, core sales increased 1% in the reported quarter.

Pentair plc Price, Consensus and EPS Surprise
 

Pentair plc Price, Consensus and EPS Surprise

Pentair plc price-consensus-eps-surprise-chart | Pentair plc Quote

Cost of sales increased 3% to $513 million from $498 million in the year-ago quarter. Gross profit in the reported quarter was $287 million, up 1.5% from the prior-year quarter.

Selling, general and administrative expenses amounted to $132 million, down from $141 million in the year-ago quarter. Research and development expenses went up 8% year over year to $21 million. Adjusted segmental operating income declined 6% year over year to $154 million.

Segmental Performance

Net sales in the Aquatic Systems segment declined around 2% year over year to $271 million. Operating earnings decreased 4% to $77 million.

Net sales in the Filtration Solutions segment totaled $286 million, up 9% from the prior-year quarter. Operating earnings declined 4% year over year to $50 million.

Net sales in the Flow Technologies segment totaled $243 million, up 0.5% from the prior-year quarter. Segmental operating earnings declined 6% year over year to $42 million.

Financial Update

Pentair had cash and cash equivalents of $80.5 million as of Jun 30, 2019, up from $74.3 million as of Dec 31, 2018. The company generated $99 million of cash in operations during the first half of 2019 compared with $178 million in the prior-year comparable period.

Guidance

Pentair’s adjusted EPS guidance for 2019 is pegged at $2.35, at the upper end of its previous guidance of $2.30-$2.35. Sales in 2019 is likely to be flat to up 1% on a reported basis and flat to down 1% on a core basis compared with 2018 levels.

Pentair provided second-quarter 2019 adjusted earnings per share guidance at 54-56 cents. Sales in the quarter are anticipated to be flat to up 2% on a reported basis and approximately down 1% to 3% on a core basis compared with the prior-year quarter.

Price Performance

Pentair stock has declined 14.9% in the past year against the industry’s growth of 10%.

Zacks Rank and Stocks to Consider

Pentaircurrently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Roper Technologies, Inc. ROP, John Bean Technologies Corp. JBT and CECO Environmental Corp. CECE, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Roper Technologies has an estimated earnings growth rate of 9.8% for the ongoing year. The company’s shares have gained 31.9% in the past year.

John Bean Technologies has an expected earnings growth rate of 5.9% for the current year. The stock has appreciated 29.2% in a year’s time.

CECO Environmental has a projected earnings growth rate of 84.8% for 2019. The company’s shares have rallied 31.3% over the past year.

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