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Pentair (PNR) Surpasses Earnings, Sales Estimates in Q4

Zacks Equity Research

Pentair plc PNR posted fourth-quarter 2018 adjusted earnings per share (EPS) of 60 cents, up 15.4% from the year-ago quarter’s tally. Adjusted EPS beat the Zacks Consensus Estimate as well as management’s guidance of 59 cents.

Including one-time items, the company posted earnings of 54 cents per share, up 80% year over year.

Net sales rose 3% year over year to $741 million. The figure surpassed the Zacks Consensus Estimate of $737 million. Excluding the impact of currency translation and acquisitions, core sales improved 6%.

Pentair plc Price, Consensus and EPS Surprise

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


Cost of sales inched up 1.2% to $473 million from $467 million in the year-ago quarter. Gross profit in the reported quarter was $268 million, up 5.6% from $254 million in the prior-year quarter.  

Selling, general and administrative expenses amounted to $135 million, down from $150 million in the year-ago quarter. Research and development expenses went up 6.5% year over year to $20 million. Adjusted segment operating income increased 5% year over year to $134 million.   

Segmental Performance

Net sales in the Aquatic Systems segment rose around 10% year over year to $277 million. Operating earnings increased 9.7% to $78 million.

Net sales in the Filtration Solutions segment totaled $247 million, down 2.6% from the prior-year quarter. Operating earnings increased 7.3% year over year to $44 million.

Net sales in the Flow Technologies segment totaled $217 million, up 0.5% from the year-earlier quarter’s tally. Segmental operating earnings declined 7.2% year over year to $26 million.

Financial Update

Pentair had cash and cash equivalents of $74.3 million as of Dec 31, 2018, down from $86.3 million recorded as of Dec 31, 2017. The company recorded cash flow from operations of $458 million during the 2018, compared with $279 million in the prior year.

2018 Performance    

Pentair reported adjusted EPS of $2.35 for 2018, up from $1.94 a year ago. Earnings beat management’s guidance and the Zacks Consensus Estimate of $2.33. Earnings from continuing operations was $1.81 compared with 62 cents in the prior year.

Net sales went up 4.2% year over year to $2.96 billion in 2018, in line with the company’s guidance. Sales came in line with the Zacks Consensus Estimate as well.


For 2019, the company projects adjusted EPS in the range of $2.50-$2.60. The company expects sales to grow roughly 5-6% on a reported basis and 4-5% on core basis.

The company also provided earnings guidance for first-quarter 2019. It expects adjusted EPS in range of 52-55 cents. Net sales for the quarter are projected to inch up around 0-1% on reported basis and roughly 4-5% on a core basis from first-quarter 2018 tally.

Price Performance

Pentair stock has plunged 43.5% in the past year compared with the industry’s 18.8% decline.

Zacks Rank & Key Picks

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

A few better-ranked stocks in the same sector are Alarm.com Holdings, Inc. ALRM, Bemis Company, Inc. BMS and Enersys ENS. While Alarm.com and Bemis sport a Zacks Rank #1 (Strong Buy), Enersys carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alarm.com has an earnings growth rate of 7.8% for 2019. The stock has rallied 65.8% in a year’s time.

Bemis has an earnings growth rate of 7.4% for 2019. Its shares have moved up 2.6% in the past year.

Enersys has an earnings growth rate of 9.5% for 2019. The company’s shares have gained 19.2% in the past year.

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