We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fortive (FTV) Down 0.4% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Fortive (FTV - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fortive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fortive Q2 Earnings & Revenues Beat Estimates
Fortive reported second-quarter 2023 adjusted earnings of 85 cents per share, outpacing the Zacks Consensus Estimate by 4.9%. The bottom line increased 9% year over year.
Revenues rose 4.3% year over year to $1.526 billion and beat the Zacks Consensus Estimate by 1.7%. Core revenues also moved up 5.5% from the year-ago quarter’s levels.
The top line was driven by continued momentum in software and services businesses, recovery in the healthcare segment, strength in Fortive business system and strong execution amid a challenging macroeconomic environment.
The company also raised guidance for 2023. Fortive now projects adjusted net earnings in the range of $3.36-$3.42 per share (earlier view: $3.29-$3.40).
Revenues are now anticipated in the $6.070-$6.1 billion band (earlier view: $6-$6.1 billion).
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $653 million (contributing 42.8% to total revenues), up 3.6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $537 million (35.2%), up 7.7% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment registered revenues of $336 million (22%), up 0.6% from the prior-year quarter’s levels owing to consumables demand recovery in China as well as high new logos and deployments in software business.
Operating Details
In the quarter under review, adjusted gross margin came in at 59.5%, which expanded 250 basis points (bps) year over year.
Total operating costs (selling, general and administrative expenses, and research and development expenditures) were $614.1 million, up 2.1% year over year.
Adjusted operating margin was 26%, expanding 190 bps on a year-over-year basis.
Segment-wise, adjusted operating margins from Intelligent Operating Solutions and Precision Technologies were 33% and 25.7%, expanding 420 bps and 190 bps, respectively, year over year.
However, Advanced Healthcare Solutions’ adjusted operating margin of 22.5% contracted 60 bps.
Balance Sheet & Cash Flow
As of Jun 30, cash and cash equivalents were $712.8 million compared with $672.8 million as of Mar 31.
As of Jun 30, accounts receivables were $935.2 million compared with $940.7 million as of Mar 31.
FTV generated operating cash flow of $321 million compared with $294.4 million reported in the previous-year quarter.
Non -GAAP free cash flow was $300 million compared with $276 million in the prior-year quarter.
Q3, Q4 & 2023 Guidance
For third-quarter 2023, management expects adjusted net earnings in the range of 82-85 cents per share. Revenues are projected in the $1.505-$1.520 billion band.
Fortive expects adjusted operating margin to be between 25.5% and 26%. Free cash flow is projected to be $345 million.
For fourth-quarter 2023, management estimates adjusted net earnings in the range of 94-97 cents per share. Revenues are projected in the $1.580-$1.595 billion band. Fortive anticipates adjusted operating margin to be between 27% and 27.5%. Free cash flow is suggested to be $465 million.
For 2023, the company expects adjusted operating margin to be between 25.5% and 26%. Free cash flow is projected to be around $1.260 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Fortive has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fortive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Fortive (FTV) Down 0.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Fortive (FTV - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fortive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fortive Q2 Earnings & Revenues Beat Estimates
Fortive reported second-quarter 2023 adjusted earnings of 85 cents per share, outpacing the Zacks Consensus Estimate by 4.9%. The bottom line increased 9% year over year.
Revenues rose 4.3% year over year to $1.526 billion and beat the Zacks Consensus Estimate by 1.7%. Core revenues also moved up 5.5% from the year-ago quarter’s levels.
The top line was driven by continued momentum in software and services businesses, recovery in the healthcare segment, strength in Fortive business system and strong execution amid a challenging macroeconomic environment.
The company also raised guidance for 2023. Fortive now projects adjusted net earnings in the range of $3.36-$3.42 per share (earlier view: $3.29-$3.40).
Revenues are now anticipated in the $6.070-$6.1 billion band (earlier view: $6-$6.1 billion).
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $653 million (contributing 42.8% to total revenues), up 3.6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $537 million (35.2%), up 7.7% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment registered revenues of $336 million (22%), up 0.6% from the prior-year quarter’s levels owing to consumables demand recovery in China as well as high new logos and deployments in software business.
Operating Details
In the quarter under review, adjusted gross margin came in at 59.5%, which expanded 250 basis points (bps) year over year.
Total operating costs (selling, general and administrative expenses, and research and development expenditures) were $614.1 million, up 2.1% year over year.
Adjusted operating margin was 26%, expanding 190 bps on a year-over-year basis.
Segment-wise, adjusted operating margins from Intelligent Operating Solutions and Precision Technologies were 33% and 25.7%, expanding 420 bps and 190 bps, respectively, year over year.
However, Advanced Healthcare Solutions’ adjusted operating margin of 22.5% contracted 60 bps.
Balance Sheet & Cash Flow
As of Jun 30, cash and cash equivalents were $712.8 million compared with $672.8 million as of Mar 31.
As of Jun 30, accounts receivables were $935.2 million compared with $940.7 million as of Mar 31.
FTV generated operating cash flow of $321 million compared with $294.4 million reported in the previous-year quarter.
Non -GAAP free cash flow was $300 million compared with $276 million in the prior-year quarter.
Q3, Q4 & 2023 Guidance
For third-quarter 2023, management expects adjusted net earnings in the range of 82-85 cents per share. Revenues are projected in the $1.505-$1.520 billion band.
Fortive expects adjusted operating margin to be between 25.5% and 26%. Free cash flow is projected to be $345 million.
For fourth-quarter 2023, management estimates adjusted net earnings in the range of 94-97 cents per share. Revenues are projected in the $1.580-$1.595 billion band. Fortive anticipates adjusted operating margin to be between 27% and 27.5%. Free cash flow is suggested to be $465 million.
For 2023, the company expects adjusted operating margin to be between 25.5% and 26%. Free cash flow is projected to be around $1.260 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Fortive has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fortive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.