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Pentair (PNR) Beats on Q1 Earnings and Revenue Estimates
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Pentair plc (PNR - Free Report) reported first-quarter 2017 adjusted earnings of 65 cents per share, a 6.6% increase from the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of 61 cents.
Including one-time items, the company reported earnings of 44 cents per share, down 12% from 50 cents recorded in the year-ago quarter.
Net sales decreased 1% year over year to $1.184 billion. However, the figure surpassed the Zacks Consensus Estimate of $1.141 billion. Excluding the unfavorable impact of currency translation, core sales declined 1%.
Cost of sales advanced 0.3% to $761 million in the quarter from $758.7 million in the year-ago quarter. Gross profit in the reported quarter was $422.3 million, down 2% from $431.3 million recorded in the prior-year quarter. Gross margin contracted 50 basis points (bps) year over year to 35.7% in the quarter.
Selling, general and administrative expenses inched up 1.6% year over year to $253.9 million. Research and development expenses rose 5.3% to $30 million. Adjusted operating income went up 3% to $184 million from $182 million in the year-ago quarter. Operating margin expanded 20 bps to 15.5%.
Segmental Performance
Sales from the Water Quality Systems segment climbed 2.6% year over year to $682.9 million. Operating earnings increased 14.6% to $116 million.
The Electrical segment reported revenues of $502.2 million, down 4.3% from the year-earlier quarter. Segment operating earnings were down 8.2% year over year to $103.5 million.
Financial Update
Pentair had cash and cash equivalents of $238 million at the end of first-quarter 2017 compared with $238.5 million at the end of 2016. The company recorded cash used for operating activities of $88.7 million in the reported quarter compared with cash usage of $17.7 million recorded in the prior-year quarter.
Free cash flow usage in first-quarter 2017 was $112 million compared with cash flow usage of $45 million in the year-ago quarter. Pentair paid dividends of 34.5 cents per share in first-quarter 2017. In Dec 2016, Pentair approved a 3% hike in the annual cash dividend rate for 2017 to $1.38.
Pentair previously announced that it has entered into a Share Purchase Agreement to sell its Valves & Controls business to Emerson Electric Co. (EMR - Free Report) for $3.15 billion, subject to certain customary adjustments. The results of the Valves & Controls business, which were previously reported as a stand-alone reporting segment, have been presented as discontinued operations for all periods.
Guidance
Pentair reaffirmed its full-year 2017 adjusted EPS guidance range of $3.45–$3.55. The company raised the outlook for full-year revenues to approximately $4.8 billion from the prior view of $4.7 billion. It also guided second-quarter 2017 adjusted EPS guidance range of 97–99 cents. The company projects second-quarter revenues to be approximately $1.24 billion, which would be down approximately 5% on a reported and core basis compared to second-quarter 2016 revenue.
Share Price Performance
Pentair outperformed the Zacks classified Machinery-Thermal Products sub-industry with respect to price performance in the past one year. The stock gained 12.9%, while the industry recorded growth of 9% over the same time frame.
Donaldson Company has an average positive earnings surprise of 5.93% for the trailing four quarters. Casella Waste generated an outstanding average positive earnings surprise of 165.21% in the past four quarters.
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Pentair (PNR) Beats on Q1 Earnings and Revenue Estimates
Pentair plc (PNR - Free Report) reported first-quarter 2017 adjusted earnings of 65 cents per share, a 6.6% increase from the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of 61 cents.
Including one-time items, the company reported earnings of 44 cents per share, down 12% from 50 cents recorded in the year-ago quarter.
Net sales decreased 1% year over year to $1.184 billion. However, the figure surpassed the Zacks Consensus Estimate of $1.141 billion. Excluding the unfavorable impact of currency translation, core sales declined 1%.
Pentair PLC. Price, Consensus and EPS Surprise
Pentair PLC. Price, Consensus and EPS Surprise | Pentair PLC. Quote
Cost of sales advanced 0.3% to $761 million in the quarter from $758.7 million in the year-ago quarter. Gross profit in the reported quarter was $422.3 million, down 2% from $431.3 million recorded in the prior-year quarter. Gross margin contracted 50 basis points (bps) year over year to 35.7% in the quarter.
Selling, general and administrative expenses inched up 1.6% year over year to $253.9 million. Research and development expenses rose 5.3% to $30 million. Adjusted operating income went up 3% to $184 million from $182 million in the year-ago quarter. Operating margin expanded 20 bps to 15.5%.
Segmental Performance
Sales from the Water Quality Systems segment climbed 2.6% year over year to $682.9 million. Operating earnings increased 14.6% to $116 million.
The Electrical segment reported revenues of $502.2 million, down 4.3% from the year-earlier quarter. Segment operating earnings were down 8.2% year over year to $103.5 million.
Financial Update
Pentair had cash and cash equivalents of $238 million at the end of first-quarter 2017 compared with $238.5 million at the end of 2016. The company recorded cash used for operating activities of $88.7 million in the reported quarter compared with cash usage of $17.7 million recorded in the prior-year quarter.
Free cash flow usage in first-quarter 2017 was $112 million compared with cash flow usage of $45 million in the year-ago quarter. Pentair paid dividends of 34.5 cents per share in first-quarter 2017. In Dec 2016, Pentair approved a 3% hike in the annual cash dividend rate for 2017 to $1.38.
Pentair previously announced that it has entered into a Share Purchase Agreement to sell its Valves & Controls business to Emerson Electric Co. (EMR - Free Report) for $3.15 billion, subject to certain customary adjustments. The results of the Valves & Controls business, which were previously reported as a stand-alone reporting segment, have been presented as discontinued operations for all periods.
Guidance
Pentair reaffirmed its full-year 2017 adjusted EPS guidance range of $3.45–$3.55. The company raised the outlook for full-year revenues to approximately $4.8 billion from the prior view of $4.7 billion. It also guided second-quarter 2017 adjusted EPS guidance range of 97–99 cents. The company projects second-quarter revenues to be approximately $1.24 billion, which would be down approximately 5% on a reported and core basis compared to second-quarter 2016 revenue.
Share Price Performance
Pentair outperformed the Zacks classified Machinery-Thermal Products sub-industry with respect to price performance in the past one year. The stock gained 12.9%, while the industry recorded growth of 9% over the same time frame.
Zacks Rank
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Donaldson Company, Inc. (DCI - Free Report) and Casella Waste Systems, Inc. (CWST - Free Report) . Both of them flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Donaldson Company has an average positive earnings surprise of 5.93% for the trailing four quarters. Casella Waste generated an outstanding average positive earnings surprise of 165.21% in the past four quarters.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>