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Why Is Pentair (PNR) Up 1.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Pentair plc (PNR - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pentair due for a pullback? 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.
Pentair Earnings & Sales Beat Estimates in Q2, Rise Y/Y
Pentair reported second-quarter 2024 adjusted earnings per share (EPS) of $1.22, which beat the Zacks Consensus Estimate of $1.15. The bottom line was above the company’s guidance of $1.15-$1.17 per share for the quarter. The reported figure also improved 18% from the year-ago quarter. The pool segment returned to sales growth after seven quarters of declines. The company witnessed margin expansions in each of its segments.
Including one-time items, EPS was $1.11 compared with the year-ago quarter’s 93 cents.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion. Excluding the impacts of acquisitions, divestitures and currency translation, core sales rose 2% in the quarter, higher than our projected increase of 1.2%.
The cost of sales declined 3% year over year to $661 million. The gross profit in the reported quarter amounted to $438 million, up 9.6% from the year-ago quarter. The gross margin was 39.8% compared with the year-ago quarter’s 36.9%.
SG&A expenses totaled $165 million, flat compared with the year-ago quarter. Research and development expenses were down 4% year over year to $25 million.
The operating income was $248 million, up 19% year over year. The adjusted segmental operating income increased 16% year over year to $271 million. The adjusted segment margin was 24.7% compared with the year-ago quarter’s 21.6%.
Segment Performances
Net sales in the Flow segment totaled $397 million, down 4% from the year-ago quarter. Core sales dipped 3%. Our model had projected a decline of 0.4%. Our estimate for the segment’s net sales was $410 million.
Operating earnings for the segment increased 13% year over year to $84 million. Our estimate for the segment’s operating profit was $85 million.
Net sales in the Water Solutions segment were down 7.6% year over year to $311 million. Core sales were down 7% year over year. Our model had projected a decline of 0.3%. Our estimate for the segment’s net sales was $335.4 million.
The segment’s earnings were $73 million, a 2.5% dip from $75 million reported in the year-ago quarter. The figure was lower than our estimate of $75 million.
Net sales in the Pool segment totaled $392 million in the quarter, a 17% increase from the year-ago quarter. Core sales were up 18% from the year-ago quarter. We had expected growth of 4.7%. Our estimate for the segment’s net sales was $350 million.
Operating earnings for the Pool segment surged 27% year over year to $134 million. Our estimate for the segment’s operating income was $124.6 million.
Cash Flow & Balance Sheet Updates
Pentair had cash and cash equivalents of around $214 million at the end of the second quarter of 2024 compared with $170 million in 2023 end. Net cash generated from operating activities was $432 million in the first half of 2024 compared with $340 million in the prior-year comparable period.
The company had a long-term debt of $1.75 billion as of Jun 30, 2024, lower than $1.99 billion as of Dec 31, 2023.
On May 6, 2024, Pentair announced that it would pay out a regular quarterly cash dividend of 23 cents per share on Aug 2, 2024, to shareholders of record at the close of business on Jul 19, 2024.
PNR repurchased 0.6 million of its shares for $50 million in the second quarter. As of Jun 30, 2024, the company had $550 million available for share repurchases under its share repurchase authorization.
Guidance for 2024
Pentair expects an adjusted EPS of $4.25 for 2024 compared with the earlier stated $4.15-$4.25. The updated guidance indicates growth of 13.3% from the adjusted EPS of $3.75 reported in 2023.
Sales in 2024 is expected to be flat to down 1% on a reported basis from the 2023 reported level.
For the third quarter, the company expects an adjusted EPS of $1.06-$1.08. Pentair anticipates the quarter’s sales to be down 2-3% from the year-ago quarter’s reported figure.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Pentair has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Pentair has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Pentair (PNR) Up 1.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Pentair plc (PNR - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pentair due for a pullback? 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.
Pentair Earnings & Sales Beat Estimates in Q2, Rise Y/Y
Pentair reported second-quarter 2024 adjusted earnings per share (EPS) of $1.22, which beat the Zacks Consensus Estimate of $1.15. The bottom line was above the company’s guidance of $1.15-$1.17 per share for the quarter. The reported figure also improved 18% from the year-ago quarter. The pool segment returned to sales growth after seven quarters of declines. The company witnessed margin expansions in each of its segments.
Including one-time items, EPS was $1.11 compared with the year-ago quarter’s 93 cents.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion. Excluding the impacts of acquisitions, divestitures and currency translation, core sales rose 2% in the quarter, higher than our projected increase of 1.2%.
The cost of sales declined 3% year over year to $661 million. The gross profit in the reported quarter amounted to $438 million, up 9.6% from the year-ago quarter. The gross margin was 39.8% compared with the year-ago quarter’s 36.9%.
SG&A expenses totaled $165 million, flat compared with the year-ago quarter. Research and development expenses were down 4% year over year to $25 million.
The operating income was $248 million, up 19% year over year. The adjusted segmental operating income increased 16% year over year to $271 million. The adjusted segment margin was 24.7% compared with the year-ago quarter’s 21.6%.
Segment Performances
Net sales in the Flow segment totaled $397 million, down 4% from the year-ago quarter. Core sales dipped 3%. Our model had projected a decline of 0.4%. Our estimate for the segment’s net sales was $410 million.
Operating earnings for the segment increased 13% year over year to $84 million. Our estimate for the segment’s operating profit was $85 million.
Net sales in the Water Solutions segment were down 7.6% year over year to $311 million. Core sales were down 7% year over year. Our model had projected a decline of 0.3%. Our estimate for the segment’s net sales was $335.4 million.
The segment’s earnings were $73 million, a 2.5% dip from $75 million reported in the year-ago quarter. The figure was lower than our estimate of $75 million.
Net sales in the Pool segment totaled $392 million in the quarter, a 17% increase from the year-ago quarter. Core sales were up 18% from the year-ago quarter. We had expected growth of 4.7%. Our estimate for the segment’s net sales was $350 million.
Operating earnings for the Pool segment surged 27% year over year to $134 million. Our estimate for the segment’s operating income was $124.6 million.
Cash Flow & Balance Sheet Updates
Pentair had cash and cash equivalents of around $214 million at the end of the second quarter of 2024 compared with $170 million in 2023 end. Net cash generated from operating activities was $432 million in the first half of 2024 compared with $340 million in the prior-year comparable period.
The company had a long-term debt of $1.75 billion as of Jun 30, 2024, lower than $1.99 billion as of Dec 31, 2023.
On May 6, 2024, Pentair announced that it would pay out a regular quarterly cash dividend of 23 cents per share on Aug 2, 2024, to shareholders of record at the close of business on Jul 19, 2024.
PNR repurchased 0.6 million of its shares for $50 million in the second quarter. As of Jun 30, 2024, the company had $550 million available for share repurchases under its share repurchase authorization.
Guidance for 2024
Pentair expects an adjusted EPS of $4.25 for 2024 compared with the earlier stated $4.15-$4.25. The updated guidance indicates growth of 13.3% from the adjusted EPS of $3.75 reported in 2023.
Sales in 2024 is expected to be flat to down 1% on a reported basis from the 2023 reported level.
For the third quarter, the company expects an adjusted EPS of $1.06-$1.08. Pentair anticipates the quarter’s sales to be down 2-3% from the year-ago quarter’s reported figure.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Pentair has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Pentair has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.