Back to top

Image: Bigstock

Pentair (PNR) to Report Q2 Earnings: What's in the Offing?

Read MoreHide Full Article

Pentair plc (PNR - Free Report) is scheduled to report second-quarter 2021 results on Jul 27, before the opening bell.

Q1 Results & Surprise History

Pentair witnessed improvements in both revenues and earnings in first-quarter 2021, primarily owing to the strong demand in the residential focused businesses. The company beat the Zacks Consensus Estimate on both counts.

The company has an impressive earnings surprise history. Pentair beat estimates in each of the trailing four quarters, the average surprise being 25.4%.

Pentair plc Price and EPS Surprise Pentair plc Price and EPS Surprise

Pentair plc price-eps-surprise | Pentair plc Quote

Q2 Estimates

The Zacks Consensus Estimate for second-quarter revenues is pegged at $910.8 million, indicating year-over-year growth of 27.7%. The same for earnings stands at 80 cents, suggesting year-over-year improvement of 35.6%. The Zacks Consensus Estimate for the June-end quarter’s earnings has moved up 7% over the past seven days.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Pentair this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Pentair is +0.28%.

Zacks Rank: Pentair currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors to Note

Pentair continues to witness solid improvement in its residential facing businesses. The company’s pool business has been benefiting from increased demand for swimming pools as consumers were forced to stay at home amid the pandemic, which triggered the desire to invest in their backyards. Demand for new pools and pool maintenance remains strong. Considering that nearly 80% of Consumer Solutions segment serves residential markets, the robust demand is likely to get reflected in the second-quarter results. The company’s efforts to expand in the areas of pool, and residential and commercial water treatment through acquisitions, introduction of water-treatment solutions, investments and innovations are anticipated to have contributed to the Consumer Solutions segment’s performance in the quarter to be reported.

However, 20% of the Consumer Solutions segment’s revenues are tied to commercial business, which has exposure to restaurants and hospitality. Muted demand due to temporary shutdowns across hospitality and restaurant industries might have weighed on the segment’s quarterly performance.

The Zacks Consensus Estimate for the Consumer Solutions segment’s revenues is currently pegged at $531 million, suggesting growth of 32% year over year. The consensus mark for the segment’s operating profit for the quarter is pegged at $135 million, indicating a 39% year-over-year growth.

Activity in commercial and industrial businesses has picked up over the past few months. This is likely to have aided the Industrial & Flow Technologies segment’s second-quarter performance. This might have been impacted by lower capital spending by customers amid the pandemic induced uncertainty. The Zacks Consensus Estimate for the Industrial & Flow Technologies segment’s revenues stands at $334 million, which indicates an improvement of 7% from the prior-year quarter. The consensus estimate for the segment’s operating profit is pegged at $46.8 million for the second quarter, suggesting growth of 6% from the $44 million reported a year ago.

Pentair has been witnessing inflationary increases due to high demand and tight supply of raw materials such as metals, resins and electronics, along with increased logistics costs. While it has taken pricing actions and is focusing on productivity improvements that could help offset these increases, supply chain pressures and inflationary increases are anticipated to have weighed on second-quarter performance.

Price Performance

Shares of the company have gained 65.3% over the past year compared with the industry’s rally of 73.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks Poised to Beat Earnings Estimates

Here are some other Industrial Products stocks, which you may consider as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

Terex Corporation (TEX - Free Report) has an Earnings ESP of +15.41% and a Zacks Rank of 2, at present.

W.W. Grainger, Inc. (GWW - Free Report) , currently a Zacks #2 Ranked stock, has an Earnings ESP of +0.71%.

Crown Holdings, Inc. (CCK - Free Report) has an Earnings ESP of +3.57% and a Zacks Rank #3, currently.

Published in