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Why Is Pentair plc (PNR) Up 9.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Pentair plc (PNR - Free Report) . Shares have added about 9.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pentair plc due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Pentair Earnings and Sales Surpass Estimates in Q3
Pentair has reported third-quarter 2023 adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 87 cents per share. The bottom line surpassed the company’s guidance of 84-89 cents but dropped 5% from the 99 cents reported in the prior year.
Including one-time items, EPS was 79 cents compared with the prior-year quarter’s 70 cents.
Net sales declined 4% year over year to $1.01 billion in the quarter under review. However, the top line outpaced the Zacks Consensus Estimate of $991 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 7% in the quarter.
The cost of sales declined 9.9% year over year to $637 million. The gross profit in the reported quarter amounted to $372 million, up 6.7% from the prior-year quarter. The gross margin was 36.9% compared with the year-ago quarter’s 33.0%.
SG&A expenses totaled $166 million, which declined 6.3% from the prior-year quarter’s $177 million. Research and development expenses were up 7.6% year over year to $25.5 million.
The operating income in the quarter was $180 million, up 22.4% year over year. The adjusted segmental operating income increased 3% year over year to $212 million. The segment margin came in at 21% in the reported quarter compared with the year-ago quarter’s 19.6%.
Segmental Performance
Net sales in the Industrial and Flow Technologies segment totaled $400 million, up 2.7% from the prior-year quarter. Core sales grew 1% in the quarter under review. Our estimate for the segment’s net sales was $401 million for the quarter.
Operating earnings for the segment rose 18% year over year to $78 million. Our estimate for the segment’s operating profit was $67 million.
Net sales in the Water Solutions segment rose 8.8% year over year to $299 million. Core sales were flat year over year in the quarter. Our estimate for the segment’s net sales was $285 million for the quarter. The segment’s earnings were $69 million compared with the $49 million reported in the year-ago quarter. The figure was higher than our estimate of $64 million.
Net sales in the Pool segment totaled $309 million in the quarter, down 20.8% from the year-ago quarter. Core sales were down 21% from the prior-year quarter. Our estimate for the segment’s net sales were $295 million. Operating earnings for the segment fell 17.1% year over year to $91 million. Our estimate for the segment’s operating income was $88 million.
Financial Update
Pentair had cash and cash equivalents of around $137 million at the end of the third quarter compared with $109 million at 2022-end. Net cash generated from operating activities was $502.3 million in the first nine months of the current year compared with $271.5 million in the prior-year period. The company had a long-term debt of $1,994 million as of Sep 30, 2023, down from $2,317 million as of Dec 31, 2022.
Guidance
Backed by the upbeat results in the first nine months of 2023, Pentair expects adjusted earnings per share of $3.70-$3.75 for 2023, updated from the previously mentioned $3.65-$3.75. Sales growth for the year is expected to be down 1% on a reported basis.
For the fourth quarter of 2023, the company expects adjusted earnings per share of 82-87 cents. Pentair anticipates current-quarter sales to be down 3-4% from the prior-year quarter’s reported figure.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -7.94% due to these changes.
VGM Scores
At this time, Pentair plc has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Pentair plc has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Pentair plc (PNR) Up 9.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Pentair plc (PNR - Free Report) . Shares have added about 9.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pentair plc due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Pentair Earnings and Sales Surpass Estimates in Q3
Pentair has reported third-quarter 2023 adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 87 cents per share. The bottom line surpassed the company’s guidance of 84-89 cents but dropped 5% from the 99 cents reported in the prior year.
Including one-time items, EPS was 79 cents compared with the prior-year quarter’s 70 cents.
Net sales declined 4% year over year to $1.01 billion in the quarter under review. However, the top line outpaced the Zacks Consensus Estimate of $991 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 7% in the quarter.
The cost of sales declined 9.9% year over year to $637 million. The gross profit in the reported quarter amounted to $372 million, up 6.7% from the prior-year quarter. The gross margin was 36.9% compared with the year-ago quarter’s 33.0%.
SG&A expenses totaled $166 million, which declined 6.3% from the prior-year quarter’s $177 million. Research and development expenses were up 7.6% year over year to $25.5 million.
The operating income in the quarter was $180 million, up 22.4% year over year. The adjusted segmental operating income increased 3% year over year to $212 million. The segment margin came in at 21% in the reported quarter compared with the year-ago quarter’s 19.6%.
Segmental Performance
Net sales in the Industrial and Flow Technologies segment totaled $400 million, up 2.7% from the prior-year quarter. Core sales grew 1% in the quarter under review. Our estimate for the segment’s net sales was $401 million for the quarter.
Operating earnings for the segment rose 18% year over year to $78 million. Our estimate for the segment’s operating profit was $67 million.
Net sales in the Water Solutions segment rose 8.8% year over year to $299 million. Core sales were flat year over year in the quarter. Our estimate for the segment’s net sales was $285 million for the quarter. The segment’s earnings were $69 million compared with the $49 million reported in the year-ago quarter. The figure was higher than our estimate of $64 million.
Net sales in the Pool segment totaled $309 million in the quarter, down 20.8% from the year-ago quarter. Core sales were down 21% from the prior-year quarter. Our estimate for the segment’s net sales were $295 million. Operating earnings for the segment fell 17.1% year over year to $91 million. Our estimate for the segment’s operating income was $88 million.
Financial Update
Pentair had cash and cash equivalents of around $137 million at the end of the third quarter compared with $109 million at 2022-end. Net cash generated from operating activities was $502.3 million in the first nine months of the current year compared with $271.5 million in the prior-year period. The company had a long-term debt of $1,994 million as of Sep 30, 2023, down from $2,317 million as of Dec 31, 2022.
Guidance
Backed by the upbeat results in the first nine months of 2023, Pentair expects adjusted earnings per share of $3.70-$3.75 for 2023, updated from the previously mentioned $3.65-$3.75. Sales growth for the year is expected to be down 1% on a reported basis.
For the fourth quarter of 2023, the company expects adjusted earnings per share of 82-87 cents. Pentair anticipates current-quarter sales to be down 3-4% from the prior-year quarter’s reported figure.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -7.94% due to these changes.
VGM Scores
At this time, Pentair plc has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Pentair plc has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.