We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Fortive (FTV) Up 3.5% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Fortive (FTV - Free Report) . Shares have added about 3.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fortive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fortive Q4 Earnings Beat Estimates
Fortive reported fourth-quarter 2023 adjusted earnings of 98 cents per share, topping the Zacks Consensus Estimate by 5.4%. The bottom line increased 11% year over year.
Revenues rose 4% year over year to $1.58 billion and beat the Zacks Consensus Estimate by 1%. Core revenues also moved up 3% year over year, gaining from acceleration in the Intelligent Operating Solutions and Healthcare segments.
The year-over-year improvement in the top line was driven by continued momentum in FBS and transition toward recurring revenues amid a challenging macroeconomic environment.
In 2023, FTV also inked an agreement to streamline its real estate footprint within its Precision Technologies Segment for proceeds of $90 million. Management anticipates the transaction to be concluded in the first half of 2024, with a gain from the transaction recognized at the time of closing.
The company also provided guidance for 2024. Management projects adjusted net earnings to be between $3.73 per share and $3.85 per share.
Revenues are anticipated to be between $6.425 billion and $6.525 billion, indicating 6-8% growth from the year-ago levels.
Core revenue growth is suggested to be between 2% and 4%. Free cash flow is forecast to be $1.375 billion.
Adjusted operating profit is envisioned in the range of $1.725-$1.775 billion, suggesting 10-13% growth from the prior-year levels.
For first-quarter 2024, adjusted net earnings are estimated in the range of 77-80 cents per share. Revenues are envisioned in the $1.515-$1.540 billion band.
Free cash flow is forecast to be $180 million. Adjusted operating profit is forecast in the range of $370-$385 million, indicating 6-10% growth from the year-earlier levels.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $683 million (contributing 43.1% to total revenues), up 6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $549 million (34.7%), down 1% year over year.
Advanced Healthcare Solutions: This segment registered revenues of $352 million (22.2%), up 2% year over year.
Operating Details
In the quarter under review, adjusted gross margin reached 60.5%, which expanded 220 basis points (bps) year over year.
Total operating costs (selling, general and administrative expenses, and research and development expenditures) were $636.6 million, up 5.8% year over year.
Adjusted operating margin was 27.7%, extending 220 bps on a year-over-year basis.
Segment-wise, adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 34.2% and 29%, rising 300 bps and 270 bps, respectively, year over year.
As of Dec 31, cash and cash equivalents were $1.888 billion compared with $714.1 million as of Sep 29.
As of Dec 31, accounts receivables were $960.8 million compared with $925.4 million as of Sep 29.
FTV generated operating cash flow of $446.8 million for the fourth quarter compared with $464.2 million in the previous year. Non-GAAP free cash flow was $412.7 million compared with $428.1 million in the prior-year quarter. FTV generated operating cash flow of $1,353.6 million for 2023 compared with $1,303.2 million in the previous year. Non-GAAP free cash flow was $1,245.8 million for 2023 compared with $1,207.4 million in the prior year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Fortive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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, Fortive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Fortive belongs to the Zacks Electronics - Testing Equipment industry. Another stock from the same industry, Teradyne (TER - Free Report) , has gained 8.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Teradyne reported revenues of $670.6 million in the last reported quarter, representing a year-over-year change of -8.4%. EPS of $0.79 for the same period compares with $0.92 a year ago.
For the current quarter, Teradyne is expected to post earnings of $0.37 per share, indicating a change of -32.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +10% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Teradyne. Also, the stock has a VGM Score of D.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Fortive (FTV) Up 3.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Fortive (FTV - Free Report) . Shares have added about 3.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fortive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fortive Q4 Earnings Beat Estimates
Fortive reported fourth-quarter 2023 adjusted earnings of 98 cents per share, topping the Zacks Consensus Estimate by 5.4%. The bottom line increased 11% year over year.
Revenues rose 4% year over year to $1.58 billion and beat the Zacks Consensus Estimate by 1%. Core revenues also moved up 3% year over year, gaining from acceleration in the Intelligent Operating Solutions and Healthcare segments.
The year-over-year improvement in the top line was driven by continued momentum in FBS and transition toward recurring revenues amid a challenging macroeconomic environment.
In 2023, FTV also inked an agreement to streamline its real estate footprint within its Precision Technologies Segment for proceeds of $90 million. Management anticipates the transaction to be concluded in the first half of 2024, with a gain from the transaction recognized at the time of closing.
The company also provided guidance for 2024. Management projects adjusted net earnings to be between $3.73 per share and $3.85 per share.
Revenues are anticipated to be between $6.425 billion and $6.525 billion, indicating 6-8% growth from the year-ago levels.
Core revenue growth is suggested to be between 2% and 4%. Free cash flow is forecast to be $1.375 billion.
Adjusted operating profit is envisioned in the range of $1.725-$1.775 billion, suggesting 10-13% growth from the prior-year levels.
For first-quarter 2024, adjusted net earnings are estimated in the range of 77-80 cents per share. Revenues are envisioned in the $1.515-$1.540 billion band.
Free cash flow is forecast to be $180 million. Adjusted operating profit is forecast in the range of $370-$385 million, indicating 6-10% growth from the year-earlier levels.
Top Line in Detail
Fortive operates under the following three organized segments.
Intelligent Operating Solutions: The segment generated revenues of $683 million (contributing 43.1% to total revenues), up 6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $549 million (34.7%), down 1% year over year.
Advanced Healthcare Solutions: This segment registered revenues of $352 million (22.2%), up 2% year over year.
Operating Details
In the quarter under review, adjusted gross margin reached 60.5%, which expanded 220 basis points (bps) year over year.
Total operating costs (selling, general and administrative expenses, and research and development expenditures) were $636.6 million, up 5.8% year over year.
Adjusted operating margin was 27.7%, extending 220 bps on a year-over-year basis.
Segment-wise, adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 34.2% and 29%, rising 300 bps and 270 bps, respectively, year over year.
Advanced Healthcare Solutions’ adjusted operating margin of 25.7% improved 160 bps.
Balance Sheet & Cash Flow
As of Dec 31, cash and cash equivalents were $1.888 billion compared with $714.1 million as of Sep 29.
As of Dec 31, accounts receivables were $960.8 million compared with $925.4 million as of Sep 29.
FTV generated operating cash flow of $446.8 million for the fourth quarter compared with $464.2 million in the previous year. Non-GAAP free cash flow was $412.7 million compared with $428.1 million in the prior-year quarter. FTV generated operating cash flow of $1,353.6 million for 2023 compared with $1,303.2 million in the previous year. Non-GAAP free cash flow was $1,245.8 million for 2023 compared with $1,207.4 million in the prior year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Fortive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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, Fortive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Fortive belongs to the Zacks Electronics - Testing Equipment industry. Another stock from the same industry, Teradyne (TER - Free Report) , has gained 8.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Teradyne reported revenues of $670.6 million in the last reported quarter, representing a year-over-year change of -8.4%. EPS of $0.79 for the same period compares with $0.92 a year ago.
For the current quarter, Teradyne is expected to post earnings of $0.37 per share, indicating a change of -32.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +10% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Teradyne. Also, the stock has a VGM Score of D.