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Fortive's (FTV) Q4 Earnings and Revenues Trump Estimates
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Fortive Corporation (FTV - Free Report) reported fourth-quarter 2020 earnings of 70 cents per share, which outpaced the Zacks Consensus Estimate of 61 cents. The figure increased 18.6% from the year-ago quarter but decreased 25.5% on a sequential basis.
Revenues increased 4.9% year over year to $1.32 billion. Also, core revenues increased 0.7% from the year-ago quarter.
The top line also outpaced the Zacks Consensus Estimate by 2.5%. The top-line growth was driven by strong SaaS revenue growth.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $544.9 million (accounting for 41% of total fourth-quarter revenues), which increased 3.2% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $464.2 million (35% of total revenues), which increased 2.3% from the prior-year quarter.
Advanced Healthcare Solutions: This segment generated revenues of $315.8 million (24% of total revenues), which increased 12% from the prior-year quarter.
Fortive Corporation Price, Consensus and EPS Surprise
For the fourth quarter, gross margin came in at 57.5%, which expanded 150 basis points (bps) year over year.
Total operating expenses were $578.2 million, reflecting a 1.9% year-over-year increase. As a percentage of revenues, selling, general & administrative expenses decreased from the year-ago quarter, while research & development costs increased.
Operating margin was 13.9%, which expanded 280 bps on a year-over-year basis.
Segment wise, operating margin from Intelligent Operating Solutions came in at 19.2%, which expanded 510 bps year over year.
Precision Technologies operating margins came in at 19.2% versus 17.5% in the year-ago quarter, while Advanced Healthcare Solutions margins of 5.7% expanded 140 bps.
Balance Sheet & Cash Flow
At fourth quarter-end, cash and cash equivalents were $1.8 billion and accounts receivables were $810.3 million.
The company generated operating cash flow of $329.4 million in the fourth quarter, up 33.3% from the year-ago period, while free cash flow of $312.6 million increased 38.8%.
Guidance
For first-quarter 2021, management expects adjusted net earnings in the range of 56-60 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 55 cents per share.
For 2021, Fortive expects adjusted net earnings in the range of $2.40-$2.55 per share. The Zacks Consensus Estimate for the same is pegged at $2.35 per share.
Long-term earnings growth for Semtech, JD.com, and Microchip Technology is currently projected at 12.5%, 51.2% and 14.9%, respectively.
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Fortive's (FTV) Q4 Earnings and Revenues Trump Estimates
Fortive Corporation (FTV - Free Report) reported fourth-quarter 2020 earnings of 70 cents per share, which outpaced the Zacks Consensus Estimate of 61 cents. The figure increased 18.6% from the year-ago quarter but decreased 25.5% on a sequential basis.
Revenues increased 4.9% year over year to $1.32 billion. Also, core revenues increased 0.7% from the year-ago quarter.
The top line also outpaced the Zacks Consensus Estimate by 2.5%. The top-line growth was driven by strong SaaS revenue growth.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $544.9 million (accounting for 41% of total fourth-quarter revenues), which increased 3.2% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $464.2 million (35% of total revenues), which increased 2.3% from the prior-year quarter.
Advanced Healthcare Solutions: This segment generated revenues of $315.8 million (24% of total revenues), which increased 12% from the prior-year quarter.
Fortive Corporation Price, Consensus and EPS Surprise
Fortive Corporation price-consensus-eps-surprise-chart | Fortive Corporation Quote
Operating Details
For the fourth quarter, gross margin came in at 57.5%, which expanded 150 basis points (bps) year over year.
Total operating expenses were $578.2 million, reflecting a 1.9% year-over-year increase. As a percentage of revenues, selling, general & administrative expenses decreased from the year-ago quarter, while research & development costs increased.
Operating margin was 13.9%, which expanded 280 bps on a year-over-year basis.
Segment wise, operating margin from Intelligent Operating Solutions came in at 19.2%, which expanded 510 bps year over year.
Precision Technologies operating margins came in at 19.2% versus 17.5% in the year-ago quarter, while Advanced Healthcare Solutions margins of 5.7% expanded 140 bps.
Balance Sheet & Cash Flow
At fourth quarter-end, cash and cash equivalents were $1.8 billion and accounts receivables were $810.3 million.
The company generated operating cash flow of $329.4 million in the fourth quarter, up 33.3% from the year-ago period, while free cash flow of $312.6 million increased 38.8%.
Guidance
For first-quarter 2021, management expects adjusted net earnings in the range of 56-60 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 55 cents per share.
For 2021, Fortive expects adjusted net earnings in the range of $2.40-$2.55 per share. The Zacks Consensus Estimate for the same is pegged at $2.35 per share.
Zacks Rank & Key Picks
Fortive currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader technology sector include Semtech Corporation (SMTC - Free Report) , JD.com, Inc. (JD - Free Report) and Microchip Technology Incorporated (MCHP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Semtech, JD.com, and Microchip Technology is currently projected at 12.5%, 51.2% and 14.9%, respectively.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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