Fortive Corporation (FTV - Free Report) reported fourth-quarter 2022 adjusted earnings of 88 cents per share, outpacing the Zacks Consensus Estimate by 4.8% and increased 11% year over year.
Revenues increased 11% year over year to $1.53 billion and beat the Zacks Consensus Estimate by 2.3%. Core revenues also moved up 14% from the year-ago quarter’s levels.
The top line was driven by healthy customer demand especially for new products and services, strength in Fortive business system and strong execution amid a challenging macroeconomic environment.
In the past year, shares of Fortive have lost 0.3% against the sub-industry’s growth of 2.7%.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $635 million (contributing 41.5% to total fourth-quarter revenues), up 9.5% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $553 million (36.1% of total revenues), up 16.7% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment generated revenues of $342 million (22.4% of total revenues), increasing 6.6% from the prior-year quarter’s levels.
Operating Details
In the quarter under review, the adjusted gross margin came in at 58.3%, which expanded 50 basis points (bps) year over year.
Total operating expenses (selling, general and administrative expenses, research and development expenses, and Russia exit and wind down costs) were $601.6 million, up 1.6% year over year.
Adjusted operating margin was 25.5%, expanding 110 bps on a year-over-year basis.
Segment-wise, the adjusted operating margin from Intelligent Operating Solutions came in at 31.2%, which expanded 330 bps year over year.
Precision Technologies’ adjusted operating margin of 26.3% expanded 240 bps year over year. Advanced Healthcare Solutions’ adjusted operating margins of 24.1% contracted 260 bps.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and cash equivalents were $709.2 million compared with $705.3 million as of Sep 30, 2022.
As of Dec 31, 2022, Accounts receivables were $958.5 million compared with $901 million as of Sep 30. 2022.
The company generated an operating cash flow of $464.2 million compared with $287 million reported in the previous-year quarter.
Free cash flow came in at $428 million compared with $265 million in the prior-year quarter.
Guidance
For first-quarter 2023, management expects adjusted net earnings in the range of 71-74 cents per share. The corresponding Zacks Consensus Estimate is pegged at 78 cents per share.
Revenues are projected in the range of $1.4-$1.435 billion. The corresponding Zacks Consensus Estimate is pegged at $1.42 billion.
The company expects adjusted operating margin to be between 23.5% and 24%. Free cash flow is expected to be $170 million.
For 2023, Fortive expects adjusted net earnings in the range of $3.25-$3.40 per share. The Zacks Consensus Estimate is pegged at $3.35 per share.
Revenues are now projected in the range of $5.950-$6.1 billion. The corresponding Zacks Consensus Estimate is pegged at $5.96 billion.
For 2023, the company expects adjusted operating margin to be between 25% and 25.5%. Free cash flow is expected to be around $1.250 billion.
Zacks Rank & Stocks to Consider
Currently, Fortive has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Cirrus Logic (CRUS - Free Report) . While Jabil sports a Zacks Rank #1 (Strong Buy), Arista and Pure Storage carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.38 per share, up 1 cent in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have gained 3.9% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 27% in the past year.
The Zacks Consensus Estimate for Cirrus Logic’s fiscal 2023 earnings is pegged at $5.91 per share. The long-term earnings growth rate is anticipated to be 3.4%.
CRUS’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 32.2%. Shares of CRUS have gained 9.2% in the past year.
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Fortive Corporation (FTV - Free Report) reported fourth-quarter 2022 adjusted earnings of 88 cents per share, outpacing the Zacks Consensus Estimate by 4.8% and increased 11% year over year.
Revenues increased 11% year over year to $1.53 billion and beat the Zacks Consensus Estimate by 2.3%. Core revenues also moved up 14% from the year-ago quarter’s levels.
The top line was driven by healthy customer demand especially for new products and services, strength in Fortive business system and strong execution amid a challenging macroeconomic environment.
In the past year, shares of Fortive have lost 0.3% against the sub-industry’s growth of 2.7%.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $635 million (contributing 41.5% to total fourth-quarter revenues), up 9.5% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $553 million (36.1% of total revenues), up 16.7% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment generated revenues of $342 million (22.4% of total revenues), increasing 6.6% from the prior-year quarter’s levels.
Operating Details
In the quarter under review, the adjusted gross margin came in at 58.3%, which expanded 50 basis points (bps) year over year.
Total operating expenses (selling, general and administrative expenses, research and development expenses, and Russia exit and wind down costs) were $601.6 million, up 1.6% year over year.
Adjusted operating margin was 25.5%, expanding 110 bps on a year-over-year basis.
Segment-wise, the adjusted operating margin from Intelligent Operating Solutions came in at 31.2%, which expanded 330 bps year over year.
Precision Technologies’ adjusted operating margin of 26.3% expanded 240 bps year over year. Advanced Healthcare Solutions’ adjusted operating margins of 24.1% contracted 260 bps.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and cash equivalents were $709.2 million compared with $705.3 million as of Sep 30, 2022.
As of Dec 31, 2022, Accounts receivables were $958.5 million compared with $901 million as of Sep 30. 2022.
The company generated an operating cash flow of $464.2 million compared with $287 million reported in the previous-year quarter.
Free cash flow came in at $428 million compared with $265 million in the prior-year quarter.
Guidance
For first-quarter 2023, management expects adjusted net earnings in the range of 71-74 cents per share. The corresponding Zacks Consensus Estimate is pegged at 78 cents per share.
Revenues are projected in the range of $1.4-$1.435 billion. The corresponding Zacks Consensus Estimate is pegged at $1.42 billion.
The company expects adjusted operating margin to be between 23.5% and 24%. Free cash flow is expected to be $170 million.
For 2023, Fortive expects adjusted net earnings in the range of $3.25-$3.40 per share. The Zacks Consensus Estimate is pegged at $3.35 per share.
Revenues are now projected in the range of $5.950-$6.1 billion. The corresponding Zacks Consensus Estimate is pegged at $5.96 billion.
For 2023, the company expects adjusted operating margin to be between 25% and 25.5%. Free cash flow is expected to be around $1.250 billion.
Zacks Rank & Stocks to Consider
Currently, Fortive has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Cirrus Logic (CRUS - Free Report) . While Jabil sports a Zacks Rank #1 (Strong Buy), Arista and Pure Storage carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.38 per share, up 1 cent in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have gained 3.9% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 27% in the past year.
The Zacks Consensus Estimate for Cirrus Logic’s fiscal 2023 earnings is pegged at $5.91 per share. The long-term earnings growth rate is anticipated to be 3.4%.
CRUS’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 32.2%. Shares of CRUS have gained 9.2% in the past year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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