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Fortive (FTV) Up 3.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Fortive (FTV - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fortive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fortive Q2 Earnings Beat Estimates
Fortive reported second-quarter 2024 adjusted earnings per share (EPS) of 93 cents, which topped the Zacks Consensus Estimate by 1.1%. The bottom line increased 9% year over year.
Revenues rose 2% year over year to $1.55 billion. However, it missed the Zacks Consensus Estimate by 0.6%. Core revenues were flat year over year.
The year-over-year improvement in the top line was driven by continued momentum in the Fortive Business System. Steady momentum in Intelligent Operating Solutions and Advanced Healthcare Solutions’ segments acted as a catalyst.
The company tweaked guidance for 2024 owing to foreign exchange headwinds and a revised outlook at Precision Technologies. Revenues are now anticipated to be between $6.25 billion and $6.3 billion compared with the previous guidance of $6.35 billion and $6.425 billion, indicating 3-4% growth from the year-ago levels.
Management now projects adjusted net EPS between $3.80 and $3.86 compared with the previous guidance of $3.77 and $3.86. Core revenue growth is anticipated to be between 2% and 3%. Free cash flow is forecasted to be $1.365 billion.
For third-quarter 2024, adjusted net EPS is estimated to be in the range of 92-95 cents. Revenues are expected in the $1.535-$1.560 billion band.
Free cash flow is forecasted to be $360 million. Core revenue growth is anticipated to be between 2% and 3.5%.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $677 million (contributing 43.6% to total revenues), up 4% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $552 million (35.5%), down 1.5% year over year.
Advanced Healthcare Solutions: This segment registered revenues of $324 million (20.9%), up 3% year over year.
Operating Details
In the reported quarter, gross profit increased 2.5% to $928.3 million on a year-over-year basis.
Adjusted operating margin was 26.9%, extending 90 bps on a year-over-year basis.
Segment-wise, the adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 32.8% and 24.8%, contracting 20 bps and 10 bps, respectively, year over year.
Advanced Healthcare Solutions’ adjusted operating margin of 26.4% rose 260 bps.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash and cash equivalents were $644.1 million compared with $704.6 million as of Mar 29.
As of Jun 28, 2024, accounts receivables were $934.5 million compared with $962.6 million as of Mar 29.
Fortive generated an operating cash flow of $308.9 million for the second quarter compared with 256.7 million in the previous quarter. Non-GAAP free cash flow was $279.7 million compared with $230.3 million in the prior quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Fortive has an average Growth Score of C, a grade with the same score on the momentum front. 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 D. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.
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Fortive (FTV) Up 3.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Fortive (FTV - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fortive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fortive Q2 Earnings Beat Estimates
Fortive reported second-quarter 2024 adjusted earnings per share (EPS) of 93 cents, which topped the Zacks Consensus Estimate by 1.1%. The bottom line increased 9% year over year.
Revenues rose 2% year over year to $1.55 billion. However, it missed the Zacks Consensus Estimate by 0.6%. Core revenues were flat year over year.
The year-over-year improvement in the top line was driven by continued momentum in the Fortive Business System. Steady momentum in Intelligent Operating Solutions and Advanced Healthcare Solutions’ segments acted as a catalyst.
The company tweaked guidance for 2024 owing to foreign exchange headwinds and a revised outlook at Precision Technologies. Revenues are now anticipated to be between $6.25 billion and $6.3 billion compared with the previous guidance of $6.35 billion and $6.425 billion, indicating 3-4% growth from the year-ago levels.
Management now projects adjusted net EPS between $3.80 and $3.86 compared with the previous guidance of $3.77 and $3.86. Core revenue growth is anticipated to be between 2% and 3%. Free cash flow is forecasted to be $1.365 billion.
For third-quarter 2024, adjusted net EPS is estimated to be in the range of 92-95 cents. Revenues are expected in the $1.535-$1.560 billion band.
Free cash flow is forecasted to be $360 million. Core revenue growth is anticipated to be between 2% and 3.5%.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $677 million (contributing 43.6% to total revenues), up 4% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $552 million (35.5%), down 1.5% year over year.
Advanced Healthcare Solutions: This segment registered revenues of $324 million (20.9%), up 3% year over year.
Operating Details
In the reported quarter, gross profit increased 2.5% to $928.3 million on a year-over-year basis.
Adjusted operating margin was 26.9%, extending 90 bps on a year-over-year basis.
Segment-wise, the adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 32.8% and 24.8%, contracting 20 bps and 10 bps, respectively, year over year.
Advanced Healthcare Solutions’ adjusted operating margin of 26.4% rose 260 bps.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash and cash equivalents were $644.1 million compared with $704.6 million as of Mar 29.
As of Jun 28, 2024, accounts receivables were $934.5 million compared with $962.6 million as of Mar 29.
Fortive generated an operating cash flow of $308.9 million for the second quarter compared with 256.7 million in the previous quarter. Non-GAAP free cash flow was $279.7 million compared with $230.3 million in the prior quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Fortive has an average Growth Score of C, a grade with the same score on the momentum front. 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 D. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.