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Fortive (FTV) Q3 Earnings & Revenues Beat Estimates, Up Y/Y
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Fortive Corporation (FTV - Free Report) reported third-quarter 2022 adjusted earnings of 79 cents per share, outpacing the Zacks Consensus Estimate by 4%. The figure also increased 19.7% year over year.
Revenues increased 12% year over year to $1.46 billion and beat the Zacks Consensus Estimate by 0.8%. Core revenues also moved up 12% from the year-ago quarter’s levels.
The top line was driven by strong customer demand especially for recently-launched new products and services, strength in Fortive business system and efficient cost management amid a challenging macroeconomic environment. At the end of the quarter, Hardware backlog was more than double compared to the beginning of 2021, added the company.
In the past year, shares of Fortive have lost 15.4% compared with the industry’s decline of 17.5%.
Image Source: Zacks Investment Research
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $614 million (contributing 42.1% to total second-quarter revenues), up 14.3% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $524 million (36% of total revenues), up 14.9% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment generated revenues of $319 million (21.9% of total revenues), increasing 3.3% from the prior-year quarter’s levels.
Fortive Corporation Price, Consensus and EPS Surprise
In the quarter under review, the adjusted gross margin came in at 58.1%, which expanded 80 basis points (bps) year over year.
Total operating expenses were $593.5 million, up 9.2% year over year. As a percentage of revenues, selling, general & administrative expenses were 33.7%, contracting 130 bps year over year. Research & development costs, as a percentage of revenues, expanding 20 bps year over year to 6.9%.
Adjusted operating margin was 24.4%, expanding 160 bps on a year-over-year basis.
Segment-wise, the adjusted operating margin from Intelligent Operating Solutions came in at 29.7%, which expanded 260 bps year over year.
Precision Technologies’ adjusted operating margins of 25.9% expanded 280 bps year over year. Advanced Healthcare Solutions’ adjusted operating margins of 20.5% contracted 250 bps.
Balance Sheet & Cash Flow
As of Sep 30, cash and cash equivalents were $705.3 million compared with $682.9 million on Jul 1.
Accounts receivables were $901 million in the reported quarter compared with $940.9 million in the prior quarter.
The company generated an operating cash flow of $329.8 million compared with $294.4 million reported in the previous quarter.
Free cash flow came in at $307 million compared with $276 million in the prior quarter.
Guidance
For fourth-quarter 2022, management expects adjusted net earnings in the range of 82-85 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 85 cents per share.
Revenues are projected in the range of $1.482-$1.502 billion. The corresponding Zacks Consensus Estimate for the quarter is pegged at $1.48 billion. For the quarter, the company expects the adjusted operating margin to be around 25.4%. Free cash flow is expected to be $395 million.
For 2022, Fortive now expects adjusted net earnings in the range of $3.10-$3.13 per share compared with the earlier guided range of $3.07-$3.13 per share. The Zacks Consensus Estimate for the same is pegged at $3.10 per share.
Revenues are now projected in the range of $5.780-$5.8 billion compared with the earlier guidance of $5.775-$5.825 billion. The corresponding Zacks Consensus Estimate is pegged at $5.8 billion.
For 2022, the company expects adjusted operating margin to be around 24.1%. Free cash flow is expected to be around $1.17 billion.
The Zacks Consensus Estimate for Pure Storage’s 2022 earnings is pegged at $1.18 per share, up 24.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have gained 10.8% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.55 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 3%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8.5%. Shares of BLKB have lost 26.4% in the past year.
The Zacks Consensus Estimate for Aspen’s fiscal 2023 earnings is pegged at $6.77 per share. The long-term earnings growth rate is anticipated to be 18.2%.
AZPN’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 6.2%. Shares of AZPN have gained 60.3% in the past year.
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Fortive (FTV) Q3 Earnings & Revenues Beat Estimates, Up Y/Y
Fortive Corporation (FTV - Free Report) reported third-quarter 2022 adjusted earnings of 79 cents per share, outpacing the Zacks Consensus Estimate by 4%. The figure also increased 19.7% year over year.
Revenues increased 12% year over year to $1.46 billion and beat the Zacks Consensus Estimate by 0.8%. Core revenues also moved up 12% from the year-ago quarter’s levels.
The top line was driven by strong customer demand especially for recently-launched new products and services, strength in Fortive business system and efficient cost management amid a challenging macroeconomic environment. At the end of the quarter, Hardware backlog was more than double compared to the beginning of 2021, added the company.
In the past year, shares of Fortive have lost 15.4% compared with the industry’s decline of 17.5%.
Image Source: Zacks Investment Research
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $614 million (contributing 42.1% to total second-quarter revenues), up 14.3% on a year-over-year basis.
Precision Technologies: This segment generated revenues of $524 million (36% of total revenues), up 14.9% from the prior-year quarter’s levels.
Advanced Healthcare Solutions: This segment generated revenues of $319 million (21.9% of total revenues), increasing 3.3% from the prior-year quarter’s levels.
Fortive Corporation Price, Consensus and EPS Surprise
Fortive Corporation price-consensus-eps-surprise-chart | Fortive Corporation Quote
Operating Details
In the quarter under review, the adjusted gross margin came in at 58.1%, which expanded 80 basis points (bps) year over year.
Total operating expenses were $593.5 million, up 9.2% year over year. As a percentage of revenues, selling, general & administrative expenses were 33.7%, contracting 130 bps year over year. Research & development costs, as a percentage of revenues, expanding 20 bps year over year to 6.9%.
Adjusted operating margin was 24.4%, expanding 160 bps on a year-over-year basis.
Segment-wise, the adjusted operating margin from Intelligent Operating Solutions came in at 29.7%, which expanded 260 bps year over year.
Precision Technologies’ adjusted operating margins of 25.9% expanded 280 bps year over year. Advanced Healthcare Solutions’ adjusted operating margins of 20.5% contracted 250 bps.
Balance Sheet & Cash Flow
As of Sep 30, cash and cash equivalents were $705.3 million compared with $682.9 million on Jul 1.
Accounts receivables were $901 million in the reported quarter compared with $940.9 million in the prior quarter.
The company generated an operating cash flow of $329.8 million compared with $294.4 million reported in the previous quarter.
Free cash flow came in at $307 million compared with $276 million in the prior quarter.
Guidance
For fourth-quarter 2022, management expects adjusted net earnings in the range of 82-85 cents per share. The corresponding Zacks Consensus Estimate for the quarter is pegged at 85 cents per share.
Revenues are projected in the range of $1.482-$1.502 billion. The corresponding Zacks Consensus Estimate for the quarter is pegged at $1.48 billion. For the quarter, the company expects the adjusted operating margin to be around 25.4%. Free cash flow is expected to be $395 million.
For 2022, Fortive now expects adjusted net earnings in the range of $3.10-$3.13 per share compared with the earlier guided range of $3.07-$3.13 per share. The Zacks Consensus Estimate for the same is pegged at $3.10 per share.
Revenues are now projected in the range of $5.780-$5.8 billion compared with the earlier guidance of $5.775-$5.825 billion. The corresponding Zacks Consensus Estimate is pegged at $5.8 billion.
For 2022, the company expects adjusted operating margin to be around 24.1%. Free cash flow is expected to be around $1.17 billion.
Zacks Rank & Stocks to Consider
Currently, Fortive has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Pure Storage (PSTG - Free Report) , Blackbaud (BLKB - Free Report) and Aspen Technology (AZPN - Free Report) . All stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Pure Storage’s 2022 earnings is pegged at $1.18 per share, up 24.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have gained 10.8% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.55 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 3%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8.5%. Shares of BLKB have lost 26.4% in the past year.
The Zacks Consensus Estimate for Aspen’s fiscal 2023 earnings is pegged at $6.77 per share. The long-term earnings growth rate is anticipated to be 18.2%.
AZPN’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 6.2%. Shares of AZPN have gained 60.3% in the past year.