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Fortive's (FTV) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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Fortive Corporation (FTV - Free Report) reported third-quarter 2021 earnings of 66 cents per share, which outpaced the Zacks Consensus Estimate by 1.5%. The figure also increased 32% year over year.
Revenues increased 12% year over year to $1.3 billion. Also, core revenues increased 9.1% from the year-ago quarter.
The top-line growth was driven by strong customer demand trends, and increase in orders for instrumentation and software offerings.
The company acquired ServiceChannel in the reported quarter, which added strength to the SaaS portfolio.
Fortive Corporation Price, Consensus and EPS Surprise
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $535.4 million (accounting for 41% of total third-quarter revenues), which increased 16.6% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $455.7 million (35% of total revenues), which increased 8.9% from the prior-year quarter.
Advanced Healthcare Solutions: This segment generated revenues of $308.4 million (24% of total revenues), which increased 9.3% from the prior-year quarter.
Operating Details
For the third quarter, gross margin came in at 57.3%, which expanded 109 basis points (bps) year over year.
Total operating expenses were $543.4 million, reflecting a 5.7% year-over-year increase. As a percentage of revenues, selling, general & administrative expenses contracted 243 bps year over year. Also, research & development costs as a percentage of revenues contracted 7 bps year over year.
Operating margin was 15.5%, which expanded 359 bps on a year-over-year basis.
Segment wise, operating margin from Intelligent Operating Solutions came in at 16.8%, which contracted 10 bps year over year.
Precision Technologies operating margins of 22.2% expanded 260 bps year over year and Advanced Healthcare Solutions margins of 11.2% grew 106 bps.
Balance Sheet & Cash Flow
As of Oct 1, 2021, cash and cash equivalents were $838.4 million compared with $1.57 billion on Jul 2, 2021.
Accounts receivables were $830.4 million for the reported quarter in comparison with $817.9 million in the prior quarter.
The company’s operating cash flow of $262.9 million for the third quarter was down 9.7% from the previous quarter and free cash flow of $252 million decreased 10.7%.
Guidance
For fourth-quarter 2021, management expects adjusted net earnings in the range of 74-79 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 78 cents per share.
For 2021, Fortive expects adjusted net earnings in the range of $2.70-$2.75 per share. The Zacks Consensus Estimate for the same is pegged at $2.73 per share.
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Fortive's (FTV) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Fortive Corporation (FTV - Free Report) reported third-quarter 2021 earnings of 66 cents per share, which outpaced the Zacks Consensus Estimate by 1.5%. The figure also increased 32% year over year.
Revenues increased 12% year over year to $1.3 billion. Also, core revenues increased 9.1% from the year-ago quarter.
The top-line growth was driven by strong customer demand trends, and increase in orders for instrumentation and software offerings.
The company acquired ServiceChannel in the reported quarter, which added strength to the SaaS portfolio.
Fortive Corporation Price, Consensus and EPS Surprise
Fortive Corporation price-consensus-eps-surprise-chart | Fortive Corporation Quote
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $535.4 million (accounting for 41% of total third-quarter revenues), which increased 16.6% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $455.7 million (35% of total revenues), which increased 8.9% from the prior-year quarter.
Advanced Healthcare Solutions: This segment generated revenues of $308.4 million (24% of total revenues), which increased 9.3% from the prior-year quarter.
Operating Details
For the third quarter, gross margin came in at 57.3%, which expanded 109 basis points (bps) year over year.
Total operating expenses were $543.4 million, reflecting a 5.7% year-over-year increase. As a percentage of revenues, selling, general & administrative expenses contracted 243 bps year over year. Also, research & development costs as a percentage of revenues contracted 7 bps year over year.
Operating margin was 15.5%, which expanded 359 bps on a year-over-year basis.
Segment wise, operating margin from Intelligent Operating Solutions came in at 16.8%, which contracted 10 bps year over year.
Precision Technologies operating margins of 22.2% expanded 260 bps year over year and Advanced Healthcare Solutions margins of 11.2% grew 106 bps.
Balance Sheet & Cash Flow
As of Oct 1, 2021, cash and cash equivalents were $838.4 million compared with $1.57 billion on Jul 2, 2021.
Accounts receivables were $830.4 million for the reported quarter in comparison with $817.9 million in the prior quarter.
The company’s operating cash flow of $262.9 million for the third quarter was down 9.7% from the previous quarter and free cash flow of $252 million decreased 10.7%.
Guidance
For fourth-quarter 2021, management expects adjusted net earnings in the range of 74-79 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 78 cents per share.
For 2021, Fortive expects adjusted net earnings in the range of $2.70-$2.75 per share. The Zacks Consensus Estimate for the same is pegged at $2.73 per share.
Zacks Rank & Stocks to Consider
Currently, Fortive has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Trimble (TRMB - Free Report) , Semtech Corporation (SMTC - Free Report) and Apple (AAPL - 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 rates for Trimble, Semtech, and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.