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Pentair (PNR) Q2 Earnings & Sales Top Estimates, '22 View Down
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Pentair plc (PNR - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of $1.02, beating the Zacks Consensus Estimate of $1.00 per share. The bottom line surpassed the company’s guidance of 92 cents to $1.01 and improved 21% from the 84 cents reported in the prior-year quarter.
Including one-time items, EPS was 92 cents compared with the prior-year quarter’s 79 cents.
Net sales improved 13% year over year to $1.06 billion and outpaced the Zacks Consensus Estimate of $1.05 billion. Excluding the impact of acquisitions, divestitures and currency translation, core sales grew 12% in the reported quarter.
The cost of sales advanced 17% year over year to $705 million. The gross profit in the reported quarter amounted to $359.5 million, up 5% from the prior-year quarter. The gross margin was 33.8% compared with the year-ago quarter’s 36.2%.
SG&A expenses totaled $146 million, down 7.9% from the prior-year quarter’s $158 million. Research and development expenses were up 10% year over year to $23 million.
The operating income in the quarter was $191 million, up 18% year over year. The adjusted segmental operating income increased 18% year over year to $206 million. The segment margin came in at 19.3% in the reported quarter, a 70 basis-point expansion from the year-ago quarter’s 17.7%.
Net sales in the Consumer Solutions segment moved up 19% year over year to $686 million. The segment’s operating earnings increased 18% year over year to $169 million.
Net sales in the Industrial and Flow Technologies segment totaled $377 million, up 4% from the prior-year quarter. Operating earnings for the segment rose 4% year over year to $59 million.
Financial Update
Pentair had cash and cash equivalents of $135 million at the end of the second quarter compared with $94.5 million at 2021-end. Net cash generated from operating activities was around $176 million in the first half of the current year compared with $361 million in the prior-year period. The company had long-term debt of $911 million as of Jun 30, 2022, up from $894 million as of Dec 31, 2021.
Guidance
Pentair now expects the adjusted EPS guidance for 2022 in the band of $3.70-$3.75. Previously, the company expected the adjusted EPS guidance between $3.70 and $3.80. The sales growth projection for the year has been updated to 8-10% on a reported basis, down from the last quarter’s projection of 9-11%. The updated guidance primarily reflects the negative impacts of foreign exchange and higher interest rates, coupled with further margin expansion.
For the third quarter of 2022, PNR expects adjusted EPS in the range of 93 cents-95 cents. Pentair anticipates current-quarter sales to be up approximately 3% to 5% on a reported basis from the prior-year period.
Price Performance
Pentair stock has fallen 34.7% over the past year compared with the industry’s fall of 36.5%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Greif Inc. (GEF - Free Report) , Titan International and RBC Bearings . While GEF and TWI each sport a Zacks Rank #1 (Strong Buy), ROLL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 17%.
Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. GEF shares have risen 14.7% in the past year.
Titan International has an estimated earnings growth rate of 165% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 43%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. TWI shares have appreciated 114.7% in a year.
RBC Bearings has an expected earnings growth rate of 48% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 6% in the past 60 days.
RBC Bearings has a trailing four-quarter earnings surprise of 3.4%, on average. ROLL shares have moved up 7.4% in the past year.
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Pentair (PNR) Q2 Earnings & Sales Top Estimates, '22 View Down
Pentair plc (PNR - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of $1.02, beating the Zacks Consensus Estimate of $1.00 per share. The bottom line surpassed the company’s guidance of 92 cents to $1.01 and improved 21% from the 84 cents reported in the prior-year quarter.
Including one-time items, EPS was 92 cents compared with the prior-year quarter’s 79 cents.
Net sales improved 13% year over year to $1.06 billion and outpaced the Zacks Consensus Estimate of $1.05 billion. Excluding the impact of acquisitions, divestitures and currency translation, core sales grew 12% in the reported quarter.
The cost of sales advanced 17% year over year to $705 million. The gross profit in the reported quarter amounted to $359.5 million, up 5% from the prior-year quarter. The gross margin was 33.8% compared with the year-ago quarter’s 36.2%.
SG&A expenses totaled $146 million, down 7.9% from the prior-year quarter’s $158 million. Research and development expenses were up 10% year over year to $23 million.
The operating income in the quarter was $191 million, up 18% year over year. The adjusted segmental operating income increased 18% year over year to $206 million. The segment margin came in at 19.3% in the reported quarter, a 70 basis-point expansion from the year-ago quarter’s 17.7%.
Pentair plc Price, Consensus and EPS Surprise
Pentair plc price-consensus-eps-surprise-chart | Pentair plc Quote
Segmental Performance
Net sales in the Consumer Solutions segment moved up 19% year over year to $686 million. The segment’s operating earnings increased 18% year over year to $169 million.
Net sales in the Industrial and Flow Technologies segment totaled $377 million, up 4% from the prior-year quarter. Operating earnings for the segment rose 4% year over year to $59 million.
Financial Update
Pentair had cash and cash equivalents of $135 million at the end of the second quarter compared with $94.5 million at 2021-end. Net cash generated from operating activities was around $176 million in the first half of the current year compared with $361 million in the prior-year period. The company had long-term debt of $911 million as of Jun 30, 2022, up from $894 million as of Dec 31, 2021.
Guidance
Pentair now expects the adjusted EPS guidance for 2022 in the band of $3.70-$3.75. Previously, the company expected the adjusted EPS guidance between $3.70 and $3.80. The sales growth projection for the year has been updated to 8-10% on a reported basis, down from the last quarter’s projection of 9-11%. The updated guidance primarily reflects the negative impacts of foreign exchange and higher interest rates, coupled with further margin expansion.
For the third quarter of 2022, PNR expects adjusted EPS in the range of 93 cents-95 cents. Pentair anticipates current-quarter sales to be up approximately 3% to 5% on a reported basis from the prior-year period.
Price Performance
Pentair stock has fallen 34.7% over the past year compared with the industry’s fall of 36.5%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Greif Inc. (GEF - Free Report) , Titan International and RBC Bearings . While GEF and TWI each sport a Zacks Rank #1 (Strong Buy), ROLL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 17%.
Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. GEF shares have risen 14.7% in the past year.
Titan International has an estimated earnings growth rate of 165% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 43%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. TWI shares have appreciated 114.7% in a year.
RBC Bearings has an expected earnings growth rate of 48% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 6% in the past 60 days.
RBC Bearings has a trailing four-quarter earnings surprise of 3.4%, on average. ROLL shares have moved up 7.4% in the past year.