Pentair plc (PNR - Free Report) has reported third-quarter 2023 adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 87 cents per share. The bottom line surpassed the company’s guidance of 84-89 cents but dropped 5% from the 99 cents reported in the prior year.
Including one-time items, EPS was 79 cents compared with the prior-year quarter’s 70 cents.
Net sales declined 4% year over year to $1.01 billion in the quarter under review. However, the top line outpaced the Zacks Consensus Estimate of $991 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 7% in the quarter.
The cost of sales declined 9.9% year over year to $637 million. The gross profit in the reported quarter amounted to $372 million, up 6.7% from the prior-year quarter. The gross margin was 36.9% compared with the year-ago quarter’s 33.0%.
SG&A expenses totaled $166 million, which declined 6.3% from the prior-year quarter’s $177 million. Research and development expenses were up 7.6% year over year to $25.5 million.
The operating income in the quarter was $180 million, up 22.4% year over year. The adjusted segmental operating income increased 3% year over year to $212 million. The segment margin came in at 21% in the reported quarter compared with the year-ago quarter’s 19.6%.
Segmental Performance
Net sales in the Industrial and Flow Technologies segment totaled $400 million, up 2.7% from the prior-year quarter. Core sales grew 1% in the quarter under review. Our estimate for the segment’s net sales was $401 million for the quarter.
Operating earnings for the segment rose 18% year over year to $78 million. Our estimate for the segment’s operating profit was $67 million.
Net sales in the Water Solutions segment rose 8.8% year over year to $299 million. Core sales were flat year over year in the quarter. Our estimate for the segment’s net sales was $285 million for the quarter. The segment’s earnings were $69 million compared with the $49 million reported in the year-ago quarter. The figure was higher than our estimate of $64 million.
Net sales in the Pool segment totaled $309 million in the quarter, down 20.8% from the year-ago quarter. Core sales were down 21% from the prior-year quarter. Our estimate for the segment’s net sales were $295 million. Operating earnings for the segment fell 17.1% year over year to $91 million. Our estimate for the segment’s operating income was $88 million.
Financial Update
Pentair had cash and cash equivalents of around $137 million at the end of the third quarter compared with $109 million at 2022-end. Net cash generated from operating activities was $502.3 million in the first nine months of the current year compared with $271.5 million in the prior-year period. The company had a long-term debt of $1,994 million as of Sep 30, 2023, down from $2,317 million as of Dec 31, 2022.
Guidance
Backed by the upbeat results in the first nine months of 2023, Pentair expects adjusted earnings per share of $3.70-$3.75 for 2023, updated from the previously mentioned $3.65-$3.75. Sales growth for the year is expected to be down 1% on a reported basis.
For the fourth quarter of 2023, the company expects adjusted earnings per share of 82-87 cents. Pentair anticipates current-quarter sales to be down 3-4% from the prior-year quarter’s reported figure.
Price Performance
The Pentair stock has gained 49.8% over the past year against the industry’s fall of 1%.
Zacks Rank and Stocks to Consider
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies (AIT - Free Report) , Astec Industries, Inc. (ASTE - Free Report) , and Brady (BRC - Free Report) . All these companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 33.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $3.24 per share. It indicates year-over-year growth of 163%. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. ASTE’s shares gained 8.2% in the last year.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. It has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 18.5% in the last year.
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Pentair plc (PNR - Free Report) has reported third-quarter 2023 adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 87 cents per share. The bottom line surpassed the company’s guidance of 84-89 cents but dropped 5% from the 99 cents reported in the prior year.
Including one-time items, EPS was 79 cents compared with the prior-year quarter’s 70 cents.
Net sales declined 4% year over year to $1.01 billion in the quarter under review. However, the top line outpaced the Zacks Consensus Estimate of $991 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 7% in the quarter.
The cost of sales declined 9.9% year over year to $637 million. The gross profit in the reported quarter amounted to $372 million, up 6.7% from the prior-year quarter. The gross margin was 36.9% compared with the year-ago quarter’s 33.0%.
SG&A expenses totaled $166 million, which declined 6.3% from the prior-year quarter’s $177 million. Research and development expenses were up 7.6% year over year to $25.5 million.
The operating income in the quarter was $180 million, up 22.4% year over year. The adjusted segmental operating income increased 3% year over year to $212 million. The segment margin came in at 21% in the reported quarter compared with the year-ago quarter’s 19.6%.
Segmental Performance
Net sales in the Industrial and Flow Technologies segment totaled $400 million, up 2.7% from the prior-year quarter. Core sales grew 1% in the quarter under review. Our estimate for the segment’s net sales was $401 million for the quarter.
Operating earnings for the segment rose 18% year over year to $78 million. Our estimate for the segment’s operating profit was $67 million.
Net sales in the Water Solutions segment rose 8.8% year over year to $299 million. Core sales were flat year over year in the quarter. Our estimate for the segment’s net sales was $285 million for the quarter. The segment’s earnings were $69 million compared with the $49 million reported in the year-ago quarter. The figure was higher than our estimate of $64 million.
Net sales in the Pool segment totaled $309 million in the quarter, down 20.8% from the year-ago quarter. Core sales were down 21% from the prior-year quarter. Our estimate for the segment’s net sales were $295 million. Operating earnings for the segment fell 17.1% year over year to $91 million. Our estimate for the segment’s operating income was $88 million.
Financial Update
Pentair had cash and cash equivalents of around $137 million at the end of the third quarter compared with $109 million at 2022-end. Net cash generated from operating activities was $502.3 million in the first nine months of the current year compared with $271.5 million in the prior-year period. The company had a long-term debt of $1,994 million as of Sep 30, 2023, down from $2,317 million as of Dec 31, 2022.
Guidance
Backed by the upbeat results in the first nine months of 2023, Pentair expects adjusted earnings per share of $3.70-$3.75 for 2023, updated from the previously mentioned $3.65-$3.75. Sales growth for the year is expected to be down 1% on a reported basis.
For the fourth quarter of 2023, the company expects adjusted earnings per share of 82-87 cents. Pentair anticipates current-quarter sales to be down 3-4% from the prior-year quarter’s reported figure.
Price Performance
The Pentair stock has gained 49.8% over the past year against the industry’s fall of 1%.
Zacks Rank and Stocks to Consider
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies (AIT - Free Report) , Astec Industries, Inc. (ASTE - Free Report) , and Brady (BRC - Free Report) . All these companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 33.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $3.24 per share. It indicates year-over-year growth of 163%. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. ASTE’s shares gained 8.2% in the last year.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. It has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 18.5% in the last year.
Research Chief 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.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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