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Pentair plc (PNR - Free Report) reported third-quarter 2020 adjusted earnings per share (EPS) of 70 cents, beating the Zacks Consensus Estimate of 52 cents. The bottom line also improved 21% from 58 cents reported in the prior-year quarter. The improvement can be attributed to ongoing strong demand in the residential focused businesses.
Including one-time items, earnings were 66 cents compared with the prior-year quarter’s 54 cents.
Net sales increased 12% year over year to $798.5 million. Further, the top line surpassed the Zacks Consensus Estimate of $682 million. Excluding the impact of acquisitions, divestitures and currency translation, core sales rose 10% in the reported quarter.
Cost of sales rose 13.6% year over year to $521 million. Gross profit in the reported quarter amounted to $277 million, up 9% from the prior-year quarter. Gross margin came in at 34.7% compared with the year-ago quarter’s 35.7%.
Selling, general and administrative expenses totaled $130 million compared with $126 million in the prior-year quarter. Research and development expenses declined 2.5% year over year to $19 million. Adjusted segmental operating income improved 14% year over year to $141 million.
Segmental Performance
Net sales in the Consumer Solutions segment jumped 25% year over year to $471 million led by strength in residential markets, particularly the Pool business. Operating earnings surged 39% year over year to $114 million.
Net sales in the Industrial and Flow Technologies segment totaled $327 million, down 2.6% from the prior-year quarter. Operating earnings slumped 24% year over year to $42.7 million. The segment continues to be negatively impacted by delayed capital spending globally across its commercial and industrial markets.
Financial Update
Pentair had cash and cash equivalents of $82.6 million as of Sep 30, 2020 flat compared with Dec 31, 2019. Net cash from operating activities was around $501 million during the nine-month period ended Sep 30, 2020 compared with the $266 million in the prior-year period. The company generated free cash flow of $456 million in the nine-month period ended Sep 30, 2020 compared with $221 million witnessed in the year-earlier period. The company had long-term debt of $805.2 million as of Sep 30, 2020, down from $1.03 billion as of Dec 31, 2019.
Guidance
For the current year, Pentair now expects adjusted EPS between $2.35 and $2.40, up from the previous guidance of $2.00-$2.20. The company anticipates revenues of $2.95 billion, higher than the earlier expectation of $2.8 billion.
Price Performance
Pentair’s stock has gained 26.3% over the past year compared with the industry’s growth of 27.4%.
Zacks Rank & Other Stocks to Consider
Pentair currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Industrial Products sector include Worthington Industries, Inc. (WOR - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Fortune Brands Home & Security, Inc. . While Worthington Industries sports a Zacks Rank #1 (Strong Buy), Silgan and Fortune Brands Home & Security carry a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Worthington has an estimated earnings growth rate of 19.2% for 2020. The company’s shares have gained 40% in a year’s time.
Silgan has a projected earnings growth rate of 32% for the current year. Shares of the company have gained 24% in the past year.
Fortune Brands has an expected earnings growth rate of 6.9% for the ongoing year. The stock has appreciated 49% in the past year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Pentair (PNR) Beats on Q3 Earnings & Sales, Ups '20 View
Pentair plc (PNR - Free Report) reported third-quarter 2020 adjusted earnings per share (EPS) of 70 cents, beating the Zacks Consensus Estimate of 52 cents. The bottom line also improved 21% from 58 cents reported in the prior-year quarter. The improvement can be attributed to ongoing strong demand in the residential focused businesses.
Including one-time items, earnings were 66 cents compared with the prior-year quarter’s 54 cents.
Net sales increased 12% year over year to $798.5 million. Further, the top line surpassed the Zacks Consensus Estimate of $682 million. Excluding the impact of acquisitions, divestitures and currency translation, core sales rose 10% in the reported quarter.
Cost of sales rose 13.6% year over year to $521 million. Gross profit in the reported quarter amounted to $277 million, up 9% from the prior-year quarter. Gross margin came in at 34.7% compared with the year-ago quarter’s 35.7%.
Pentair plc Price, Consensus and EPS Surprise
Pentair plc price-consensus-eps-surprise-chart | Pentair plc Quote
Selling, general and administrative expenses totaled $130 million compared with $126 million in the prior-year quarter. Research and development expenses declined 2.5% year over year to $19 million. Adjusted segmental operating income improved 14% year over year to $141 million.
Segmental Performance
Net sales in the Consumer Solutions segment jumped 25% year over year to $471 million led by strength in residential markets, particularly the Pool business. Operating earnings surged 39% year over year to $114 million.
Net sales in the Industrial and Flow Technologies segment totaled $327 million, down 2.6% from the prior-year quarter. Operating earnings slumped 24% year over year to $42.7 million. The segment continues to be negatively impacted by delayed capital spending globally across its commercial and industrial markets.
Financial Update
Pentair had cash and cash equivalents of $82.6 million as of Sep 30, 2020 flat compared with Dec 31, 2019. Net cash from operating activities was around $501 million during the nine-month period ended Sep 30, 2020 compared with the $266 million in the prior-year period. The company generated free cash flow of $456 million in the nine-month period ended Sep 30, 2020 compared with $221 million witnessed in the year-earlier period. The company had long-term debt of $805.2 million as of Sep 30, 2020, down from $1.03 billion as of Dec 31, 2019.
Guidance
For the current year, Pentair now expects adjusted EPS between $2.35 and $2.40, up from the previous guidance of $2.00-$2.20. The company anticipates revenues of $2.95 billion, higher than the earlier expectation of $2.8 billion.
Price Performance
Pentair’s stock has gained 26.3% over the past year compared with the industry’s growth of 27.4%.
Zacks Rank & Other Stocks to Consider
Pentair currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Industrial Products sector include Worthington Industries, Inc. (WOR - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Fortune Brands Home & Security, Inc. . While Worthington Industries sports a Zacks Rank #1 (Strong Buy), Silgan and Fortune Brands Home & Security carry a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Worthington has an estimated earnings growth rate of 19.2% for 2020. The company’s shares have gained 40% in a year’s time.
Silgan has a projected earnings growth rate of 32% for the current year. Shares of the company have gained 24% in the past year.
Fortune Brands has an expected earnings growth rate of 6.9% for the ongoing year. The stock has appreciated 49% in the past year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>