Pentair (PNR) Earnings and Sales Surpass Estimates in Q3
Pentair plc PNR has reported third-quarter 2023 adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 87 cents per share. The bottom line surpassed the company’s guidance of 84-89 cents but dropped 5% from the 99 cents reported in the prior year.
Including one-time items, EPS was 79 cents compared with the prior-year quarter’s 70 cents.
Net sales declined 4% year over year to $1.01 billion in the quarter under review. However, the top line outpaced the Zacks Consensus Estimate of $991 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 7% in the quarter.
The cost of sales declined 9.9% year over year to $637 million. The gross profit in the reported quarter amounted to $372 million, up 6.7% from the prior-year quarter. The gross margin was 36.9% compared with the year-ago quarter’s 33.0%.
SG&A expenses totaled $166 million, which declined 6.3% from the prior-year quarter’s $177 million. Research and development expenses were up 7.6% year over year to $25.5 million.
The operating income in the quarter was $180 million, up 22.4% year over year. The adjusted segmental operating income increased 3% year over year to $212 million. The segment margin came in at 21% in the reported quarter compared with the year-ago quarter’s 19.6%.
Pentair plc Price, Consensus and EPS Surprise
Pentair plc price-consensus-eps-surprise-chart | Pentair plc Quote
Segmental Performance
Net sales in the Industrial and Flow Technologies segment totaled $400 million, up 2.7% from the prior-year quarter. Core sales grew 1% in the quarter under review. Our estimate for the segment’s net sales was $401 million for the quarter.
Operating earnings for the segment rose 18% year over year to $78 million. Our estimate for the segment’s operating profit was $67 million.
Net sales in the Water Solutions segment rose 8.8% year over year to $299 million. Core sales were flat year over year in the quarter. Our estimate for the segment’s net sales was $285 million for the quarter. The segment’s earnings were $69 million compared with the $49 million reported in the year-ago quarter. The figure was higher than our estimate of $64 million.
Net sales in the Pool segment totaled $309 million in the quarter, down 20.8% from the year-ago quarter. Core sales were down 21% from the prior-year quarter. Our estimate for the segment’s net sales were $295 million. Operating earnings for the segment fell 17.1% year over year to $91 million. Our estimate for the segment’s operating income was $88 million.
Financial Update
Pentair had cash and cash equivalents of around $137 million at the end of the third quarter compared with $109 million at 2022-end. Net cash generated from operating activities was $502.3 million in the first nine months of the current year compared with $271.5 million in the prior-year period. The company had a long-term debt of $1,994 million as of Sep 30, 2023, down from $2,317 million as of Dec 31, 2022.
Guidance
Backed by the upbeat results in the first nine months of 2023, Pentair expects adjusted earnings per share of $3.70-$3.75 for 2023, updated from the previously mentioned $3.65-$3.75. Sales growth for the year is expected to be down 1% on a reported basis.
For the fourth quarter of 2023, the company expects adjusted earnings per share of 82-87 cents. Pentair anticipates current-quarter sales to be down 3-4% from the prior-year quarter’s reported figure.
Price Performance
The Pentair stock has gained 49.8% over the past year against the industry’s fall of 1%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies AIT, Astec Industries, Inc. ASTE, and Brady BRC. All these companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 33.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $3.24 per share. It indicates year-over-year growth of 163%. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. ASTE’s shares gained 8.2% in the last year.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. It has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 18.5% in the last year.
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
Astec Industries, Inc. (ASTE) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Pentair plc (PNR) : Free Stock Analysis Report
Brady Corporation (BRC) : Free Stock Analysis Report
