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Watts Water (WTS) Earnings & Revenues Beat Estimates in Q2
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Watts Water Technologies, Inc. (WTS - Free Report) delivered second-quarter 2018 adjusted earnings of $1.05 per share, up 26.5% year over year. The improvement was driven by strong operating performance in the Americas. Earnings also surpassed the Zacks Consensus Estimate of $1.01.
On a reported basis, Watts Water’s earnings per share improved 33% to $1.05 in the second quarter compared with 79 cents in the year-ago quarter. In the quarter, a lower effective tax rate, lower non-operating expenses as well as a favorable foreign exchange had a positive impact on the earnings.
Watts Water Technologies, Inc. Price, Consensus and EPS Surprise
Total revenues were up 8% year over year to $407.9 million in the reported quarter on the back of solid productivity initiatives. Notably, it beat the Zacks Consensus Estimate of $402 million. Organic sales were up 5% year over year.
Regionally, organic sales improved 8% in the Americas, driven by continued growth in plumbing, water quality as well as heating and hot water products. Organic sales decreased 2% in Europe owing to decline in water, plumbing and HVAC products. APMEA’s organic sales went up 5%.
Cost and Margins
Cost of sales went up 7.5% year over year to $238.5 million. Gross profit increased 8.1% to $169.4 million. Gross margin in the reported quarter expanded 10 basis points to 41.5%. Selling, general and administrative expenses were up to $117.2 million from $110.2 million posted in the prior-year quarter. Adjusted operating profit jumped 16.5% to $52.2 million in the reported quarter.
Segmental Performance
Americas: Net sales increased 8.6% to $272 million in the reported quarter. Adjusted operating profit increased 18% to $46.7 million.
Europe: Net sales were up 5.8% year over year to $117.1 million. The segment reported adjusted operating profit of $12.9 million compared with $12.7 million recorded in the year-ago quarter.
APMEA: Net sales went up 8.7% year over year to $18.8 million. Adjusted operating profit came in at $1.6 million compared with $1.8 million recorded in the year-ago quarter.
Financial Performance
Watts Water reported cash and cash equivalents of $142.6 million at the end of the second quarter, down from $280.2 million recorded at the end of 2017. Net cash provided by operating activities came in at $1.5 million at the end of the second quarter compared with $9 million a year ago.
Net debt was at $266.6 million as of Jul 1, 2018, up from $216.9 million as of Dec 31, 2017. Consequently, the net debt-to-capitalization ratio increased to 23.7% as of Jul 1, 2018 from 20.7% as of Dec 31, 2017.
The company repurchased around 59,000 shares of Class A common stock for $4.5 million during the second quarter.
Woodward surpassed estimates thrice in the trailing four quarters with an average beat of 2.44%.
Transcat exceeded estimates thrice in the trailing four quarters with an average beat of 26.04%.
AMETEK surpassed estimates in each of the trailing four quarters with an average beat of 6.42%.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Watts Water (WTS) Earnings & Revenues Beat Estimates in Q2
Watts Water Technologies, Inc. (WTS - Free Report) delivered second-quarter 2018 adjusted earnings of $1.05 per share, up 26.5% year over year. The improvement was driven by strong operating performance in the Americas. Earnings also surpassed the Zacks Consensus Estimate of $1.01.
On a reported basis, Watts Water’s earnings per share improved 33% to $1.05 in the second quarter compared with 79 cents in the year-ago quarter. In the quarter, a lower effective tax rate, lower non-operating expenses as well as a favorable foreign exchange had a positive impact on the earnings.
Watts Water Technologies, Inc. Price, Consensus and EPS Surprise
Watts Water Technologies, Inc. Price, Consensus and EPS Surprise | Watts Water Technologies, Inc. Quote
Total revenues were up 8% year over year to $407.9 million in the reported quarter on the back of solid productivity initiatives. Notably, it beat the Zacks Consensus Estimate of $402 million. Organic sales were up 5% year over year.
Regionally, organic sales improved 8% in the Americas, driven by continued growth in plumbing, water quality as well as heating and hot water products. Organic sales decreased 2% in Europe owing to decline in water, plumbing and HVAC products. APMEA’s organic sales went up 5%.
Cost and Margins
Cost of sales went up 7.5% year over year to $238.5 million. Gross profit increased 8.1% to $169.4 million. Gross margin in the reported quarter expanded 10 basis points to 41.5%. Selling, general and administrative expenses were up to $117.2 million from $110.2 million posted in the prior-year quarter. Adjusted operating profit jumped 16.5% to $52.2 million in the reported quarter.
Segmental Performance
Americas: Net sales increased 8.6% to $272 million in the reported quarter. Adjusted operating profit increased 18% to $46.7 million.
Europe: Net sales were up 5.8% year over year to $117.1 million. The segment reported adjusted operating profit of $12.9 million compared with $12.7 million recorded in the year-ago quarter.
APMEA: Net sales went up 8.7% year over year to $18.8 million. Adjusted operating profit came in at $1.6 million compared with $1.8 million recorded in the year-ago quarter.
Financial Performance
Watts Water reported cash and cash equivalents of $142.6 million at the end of the second quarter, down from $280.2 million recorded at the end of 2017. Net cash provided by operating activities came in at $1.5 million at the end of the second quarter compared with $9 million a year ago.
Net debt was at $266.6 million as of Jul 1, 2018, up from $216.9 million as of Dec 31, 2017. Consequently, the net debt-to-capitalization ratio increased to 23.7% as of Jul 1, 2018 from 20.7% as of Dec 31, 2017.
The company repurchased around 59,000 shares of Class A common stock for $4.5 million during the second quarter.
Zacks Rank & Stocks to Consider
Watts Water currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Woodward, Inc. (WWD - Free Report) , Transcat, Inc. (TRNS - Free Report) and AMETEK, Inc. (AME - Free Report) . While Woodward sports a Zacks Rank #1 (Strong Buy), Transcat and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Woodward surpassed estimates thrice in the trailing four quarters with an average beat of 2.44%.
Transcat exceeded estimates thrice in the trailing four quarters with an average beat of 26.04%.
AMETEK surpassed estimates in each of the trailing four quarters with an average beat of 6.42%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>