Pentair (PNR) to Report Q2 Earnings: What's in the Offing?
Pentair plc PNR is scheduled to report second-quarter 2023 results on Jul 27, before the opening bell.
Q1 Results
Pentair’s revenues fell year over year in first-quarter 2023 but beat the Zacks Consensus Estimate. PNR’s earnings beat the Zacks Consensus Estimate and improved year over year.
The company has an impressive earnings surprise history. Pentair beat earnings estimates in each of the trailing four quarters, the average surprise being 7.2%.
Pentair plc Price and EPS Surprise
Pentair plc price-eps-surprise | Pentair plc Quote
Q2 Estimates
The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.06 billion, indicating a decline of 0.7% from the year-ago reported figure. Core revenues are expected to fall 4%.
The consensus estimate for earnings is pegged at 95 cents per share, suggesting a year-over-year decline of 6.8%. The Zacks Consensus Estimate for quarterly earnings has been unchanged over the past 30 days.
What the Zacks Model Unveils
Our model predicts an earnings beat for Pentair this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Pentair has an Earnings ESP of +0.84%.
Zacks Rank: Pentair currently carries a Zacks Rank of 3.
Key Factors to Note
PNR has been clearing out its inventory. This ongoing optimization of inventory levels is expected to have impacted volumes in the second quarter. We, thus, expect volume to fall 10.2% year over year in the second quarter.
Pentair has been witnessing a tight supply of raw materials, such as metals, resins and electronics, along with rising logistics costs. While it has been implementing pricing actions and focusing on productivity improvements that may have negated these headwinds, supply-chain pressures and inflationary costs are likely to have weighed on the quarter’s performance.
PNR has also been focusing on productivity improvements, which is likely to have contributed to earnings in the quarter. We expect the price to rise 5.9% year over year in the quarter.
Gains from the Manitowoc Ice acquisition and expected benefits from the Transformation program are expected to have helped offset the impacts of higher costs and low volumes in the second quarter. Our model predicts acquisitions to have a positive impact of 5% on second-quarter revenues.
The company has been witnessing weak demand in the pool business recently. Reflecting this, we expect the Pool segment’s sales to be $364 million, indicating a year-over-year decline of 21.5%. The downside is driven by the ongoing inventory reduction. The segment’s operating income is expected to fall 9.1% year over year to $124.3 million.
Our model predicts the Water Solutions segment’s net sales to increase 34.9% year over year to $299.7 million in the quarter. The operating income is expected to increase 35.3% to $44 million.
We expect Industrial & Flow Technologies’ revenues to be $390.1 million, indicating an improvement of 3.4% from the prior-year quarter’s reported figure. The consensus mark for this segment’s operating profit is expected to be $66.8 million, suggesting growth of 13% from the year-ago reported figure.
Price Performance
Shares of PNR have gained 41.3% in the past year compared with the industry’s growth of 7.9%.
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Other Stocks to Consider
Here are some other Industrial Products stocks worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases.
EnerSys ENS, set to release earnings on Aug 9, has an Earnings ESP of +8.32% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ENS’ fiscal first-quarter earnings is pegged at $1.64 per share, suggesting a year-over-year improvement of 42.6%. The company has a trailing four-quarter surprise of 9%, on average.
AptarGroup, Inc. ATR, scheduled to release earnings on Jul 27, has an Earnings ESP of +1.77% and a Zacks Rank of 2.
The Zacks Consensus Estimate for ATR’s earnings for the second quarter is pegged at $1.13 per share. The company has a trailing four-quarter surprise of 6.4%, on average.
Eaton Corporation plc ETN, set to release earnings on Aug 1, has an Earnings ESP of +0.18% and a Zacks Rank of 2.
The consensus estimate for ETN’s earnings for the second quarter is pegged at $2.11 per share. The company has a trailing four-quarter surprise of 2.5%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
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