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Pentair (PNR) to Report Q2 Earnings: What's in the Cards?
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Pentair plc (PNR - Free Report) is expected to report an improvement in its top and bottom lines when it reports second-quarter 2024 results on Jul 23, before the opening bell.
The Zacks Consensus Estimate for PNR’s second-quarter revenues is pegged at $1.09 billion, indicating 1% growth from the year-ago reported figure.
The consensus estimate for earnings is pegged at $1.15 per share. Of the nine analysts providing estimates for the second quarter, three have lowered their estimate while one has raised their estimate over the past 60 days. Overall, the Zacks Consensus Estimate for PNR’s second-quarter earnings has moved down 0.86% in the past 60 days. The estimate indicates year-over-year growth of 11.65%.
Image Source: Zacks Investment Research
Solid Earnings Surprise History
Pentair’s earnings beat the Zacks Consensus Estimates in each of the trailing four quarters, the average surprise being 5.5%. This is depicted in the following chart.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our proven model does not conclusively predict 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. But that is not the case here, as you can see below.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: Pentair has an Earnings ESP of -1.63%.
Zacks Rank: Pentair currently carries a Zacks Rank of 3.
Factors Likely to Have Shaped Q2 Results
Pentair’s pool business has been struggling with weak demand and ongoing inventory correction for five straight quarters. The pool segment registered a 5.7% decline in volumes in the first quarter of 2024.
The world’s largest wholesale distributor of swimming pools and related backyard products, Pool Corporation (POOL - Free Report) , recently announced that its second-quarter revenues are expected to be below expectations due to lower new pool construction and remodel activity. This prompted analysts to revise their estimates for Pentair as well. Pool Corporation indicated that the discretionary components of its business are likely to have been impacted by cautious consumer spending on big-ticket items like swimming pools although non-discretionary and recurring pool maintenance and repair demand are expected to have remained solid.
While the decline in new pool construction is likely to have dented Pentair’s pool segment’s volumes in the second quarter, the strength in non-discretionary repair activity is expected to have mitigated this impact. Also, the company’s earlier dealer surveys indicated an increase in remodeled pool projects, thus implying that the impact on its revenues is not likely to have been as pronounced as Pool Corporation’s.
We expect a 1.2% improvement in second-quarter volumes for the pool segment (also assuming that the inventory correction has been completed) and a 5% increase in pricing. The Pool segment’s sales are projected to be $355 million, indicating year-over-year growth of 6.2%.
We expect the Flow segment’s revenues to be $411 million, indicating a decline of 0.1% from the prior-year quarter. Residential and agriculture verticals continue to be impacted by high interest rates and the ongoing weakness in industrial verticals is expected to have weighed on volumes. Our model projects a 2.4% decline in volumes while pricing is expected to have a positive impact of 2.3%.
Our model predicts the Water Solutions segment’s net sales to be flat at $336.4 million compared with the year-ago quarter. Ongoing weakness in the residential vertical is expected to have led to a 0.4% dip in volumes, which is likely to be offset by a 0.5% rise in pricing.
Pentair has been witnessing a tight supply of raw materials along with rising logistics costs. Despite the weakness in the pool segment and the cost headwinds, the company has delivered margin expansion across its segments aided by pricing, cost savings and gains from its Transformation initiatives. We expect this to have continued in the second quarter as well.
Price Performance
PNR shares have gained 20.2% in the past year compared with the industry’s 7.4% growth.
Image Source: Zacks Investment Research
Stocks That Warrant a Look
Here are some industrial products companies with the right combination of elements to post an earnings beat in their upcoming releases.
The Zacks Consensus Estimate for CR’s earnings is pegged at $1.24 per share, which indicates year-over-year growth of 12.7%. It has a trailing four-quarter average surprise of 15.2%.
Packaging Corporation of America (PKG - Free Report) , slated to release second-quarter 2024 earnings on July 23, has an Earnings ESP of +0.67% and a Zacks Rank of 2.
The consensus estimate for Packaging Corporation’s earnings is pegged at $2.11 per share. It has a trailing four-quarter average surprise of 12.3%.
Image: Bigstock
Pentair (PNR) to Report Q2 Earnings: What's in the Cards?
Pentair plc (PNR - Free Report) is expected to report an improvement in its top and bottom lines when it reports second-quarter 2024 results on Jul 23, before the opening bell.
The Zacks Consensus Estimate for PNR’s second-quarter revenues is pegged at $1.09 billion, indicating 1% growth from the year-ago reported figure.
The consensus estimate for earnings is pegged at $1.15 per share. Of the nine analysts providing estimates for the second quarter, three have lowered their estimate while one has raised their estimate over the past 60 days. Overall, the Zacks Consensus Estimate for PNR’s second-quarter earnings has moved down 0.86% in the past 60 days. The estimate indicates year-over-year growth of 11.65%.
Solid Earnings Surprise History
Pentair’s earnings beat the Zacks Consensus Estimates in each of the trailing four quarters, the average surprise being 5.5%. This is depicted in the following chart.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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. But that is not the case here, as you can see below.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: Pentair has an Earnings ESP of -1.63%.
Zacks Rank: Pentair currently carries a Zacks Rank of 3.
Factors Likely to Have Shaped Q2 Results
Pentair’s pool business has been struggling with weak demand and ongoing inventory correction for five straight quarters. The pool segment registered a 5.7% decline in volumes in the first quarter of 2024.
The world’s largest wholesale distributor of swimming pools and related backyard products, Pool Corporation (POOL - Free Report) , recently announced that its second-quarter revenues are expected to be below expectations due to lower new pool construction and remodel activity. This prompted analysts to revise their estimates for Pentair as well. Pool Corporation indicated that the discretionary components of its business are likely to have been impacted by cautious consumer spending on big-ticket items like swimming pools although non-discretionary and recurring pool maintenance and repair demand are expected to have remained solid.
While the decline in new pool construction is likely to have dented Pentair’s pool segment’s volumes in the second quarter, the strength in non-discretionary repair activity is expected to have mitigated this impact. Also, the company’s earlier dealer surveys indicated an increase in remodeled pool projects, thus implying that the impact on its revenues is not likely to have been as pronounced as Pool Corporation’s.
We expect a 1.2% improvement in second-quarter volumes for the pool segment (also assuming that the inventory correction has been completed) and a 5% increase in pricing. The Pool segment’s sales are projected to be $355 million, indicating year-over-year growth of 6.2%.
We expect the Flow segment’s revenues to be $411 million, indicating a decline of 0.1% from the prior-year quarter. Residential and agriculture verticals continue to be impacted by high interest rates and the ongoing weakness in industrial verticals is expected to have weighed on volumes. Our model projects a 2.4% decline in volumes while pricing is expected to have a positive impact of 2.3%.
Our model predicts the Water Solutions segment’s net sales to be flat at $336.4 million compared with the year-ago quarter. Ongoing weakness in the residential vertical is expected to have led to a 0.4% dip in volumes, which is likely to be offset by a 0.5% rise in pricing.
Pentair has been witnessing a tight supply of raw materials along with rising logistics costs. Despite the weakness in the pool segment and the cost headwinds, the company has delivered margin expansion across its segments aided by pricing, cost savings and gains from its Transformation initiatives. We expect this to have continued in the second quarter as well.
Price Performance
PNR shares have gained 20.2% in the past year compared with the industry’s 7.4% growth.
Stocks That Warrant a Look
Here are some industrial products companies with the right combination of elements to post an earnings beat in their upcoming releases.
Crane Company (CR - Free Report) is scheduled to release its second-quarter results on Jul 29. It has an Earnings ESP of +0.95% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CR’s earnings is pegged at $1.24 per share, which indicates year-over-year growth of 12.7%. It has a trailing four-quarter average surprise of 15.2%.
Packaging Corporation of America (PKG - Free Report) , slated to release second-quarter 2024 earnings on July 23, has an Earnings ESP of +0.67% and a Zacks Rank of 2.
The consensus estimate for Packaging Corporation’s earnings is pegged at $2.11 per share. It has a trailing four-quarter average surprise of 12.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.