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Pentair (PNR) Q4 Earnings & Revenues Beat Estimates, Up Y/Y

·4 min read

Pentair plc (PNR) delivered fourth-quarter 2019 adjusted earnings per share (EPS) of 68 cents, beating the Zacks Consensus Estimate of 65 cents. The reported figure also came in higher than the prior-year quarter’s 60 cents and management’s guidance of 64-66 cents.

Including one-time items, earnings came in at 61 cents compared with 54 cents in the prior-year quarter.

Net sales rose 2% year over year to $755 million. The figure surpassed the Zacks Consensus Estimate of $752 million. Excluding the impact of acquisitions, divestitures and currency translation, core sales declined 1% in the reported quarter.

Pentair plc Price, Consensus and EPS Surprise


Pentair plc Price, Consensus and EPS Surprise
Pentair plc Price, Consensus and EPS Surprise

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


Gross profit in the reported quarter came in at $274 million, up 2% from the prior-year quarter.

Selling, general and administrative expenses totaled $134 million compared with $135 million in the year-earlier quarter. Research and development expenses declined 10% year over year to $18 million. Adjusted segmental operating income increased 5% year on year to $141 million.

Segmental Performance

Net sales in the Aquatic Systems segment declined around 1% year over year to $276 million. Operating earnings improved 8.7% year over year to $84.9 million.

Net sales in the Filtration Solutions segment totaled $268.5 million, up 8.7% from the prior-year quarter. Operating earnings decreased 3.6% year over year to $42.5 million.

Net sales in the Flow Technologies segment amounted to $211 million, down 2.6% year over year. Segmental operating earnings climbed 10% year over year to $28.5 million.

Financial Update

Pentair had cash and cash equivalents of $82.5 million as of Dec 31, 2019, up from $74.3 million as of Dec 31, 2018. The company generated $345 million of cash from operations during 2019 compared with the $458 million reported in 2018.

On Dec 9, 2019, Pentair had announced that its board of directors approved a 6% hike in the company’s regular quarterly cash dividend rate to 19 cents per share. The hiked dividend will be paid on Feb 7, 2020 to shareholders of record at the close of business on Jan 24, 2020. The year 2020 will mark the 44th consecutive year of dividend increase.

2019 Performance

Pentair reported adjusted EPS of $2.38 in fiscal 2019, beating the Zacks Consensus Estimate of $2.35. Earnings marked a 1% improvement from the prior year and also came in ahead of management’s guidance of $2.35. Including one-time items, fiscal 2019 earnings was $2.12 compared with $1.81 in the prior fiscal.

Net sales were down 0.3% year over year to $2,957 million. The figure, however, surpassed the Zacks Consensus Estimate of $2,955 million.

Fiscal 2020 Guidance

Pentair expects adjusted EPS to lie in the band of $2.50 to $2.55 in fiscal 2020. The mid-point of the guidance indicates year-over-year growth of 6%. Sales in the ongoing year are projected be up 1-3% on a reported basis and 2-4% on a core basis compared with 2019.

For first-quarter 2020, the company expects earnings per share to at 48-51 cents. First-quarter sales will likely be up approximately 3 to 5% on a reported basis and up around 4-6% on a core basis from the prior-year quarter.

Price Performance

Shares of Pentair have rallied 10.7% in the past year compared with the industry’s growth of 34.6%.

Zacks Rank and Stocks to Consider

Pentair currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are DXP Enterprises, Inc. DXPE, Cintas Corporation CTAS and SPX FLOW, Inc. FLOW. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today's Zacks #1 Rank stocks here.

DXP Enterprises has an estimated earnings growth rate of 10.5% for the ongoing year. In a year’s time, the stock has appreciated 23.1%.

Cintas has an expected earnings growth rate of 15.6% for the current year. The stock has surged 57.8% over the past year.

SPX FLOW has a projected earnings growth rate of 9.1% for 2020. The company’s shares have gained 41.6% in the past year.

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