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Fortive Q3 Earnings Beat Estimates, Revenues Up Y/Y, Outlook Raised
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Fortive Corporation (FTV - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of 97 cents, which topped the Zacks Consensus Estimate by 4.3%. The bottom line increased 14.12% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar
Revenues rose 2.7% year over year to $1.54 billion. However, the top line missed the Zacks Consensus Estimate by 0.8%. Core revenues rose 1% year over year.
The year-over-year improvement in the top line was driven by continued momentum in Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS) along with the orders growth across all segments.
The software business segment experienced high single-digit growth in annual recurring revenues (ARR), while hardware orders were significantly bolstered by subsidiaries Fluke and Tektronix. Fluke introduced five major products in September, leading to a notable increase in orders across most regions. Meanwhile, investments in AI applications are fueling Tektronix’s expansion.
The company raised guidance for 2024 expecting double-digit growth in both earnings and cash flow in 2024. Revenues are now anticipated to be between $6.24 billion and $6.26 billion compared with the previous guidance of $6.25 billion and $6.3 billion, indicating 3% growth from the year-ago level. The Zacks Consensus Estimate is pegged at $6.28 billion.
Management now projects adjusted net EPS between $3.84 and $3.87 compared with the previous guidance of $3.80 and $3.86. The Zacks Consensus Estimate is pegged at $3.82.Core revenue growth is anticipated to be 1% for the fourth quarter and the full year. Free cash flow is forecasted to be $1.365 million. For fourth-quarter 2024, adjusted net EPS is estimated to be in the range of $1.11-$1.14. Revenues are expected in the $1.63-$1.65 billion band. The Zacks Consensus Estimate for fourth-quarter EPS and revenues is pegged at 93 cents and $1.55 billion, respectively. Free cash flow is forecasted to be $425 million.
Fortive ramped up its share buyback initiative by repurchasing around 4 million shares in the third quarter, with the anticipated spin-off remaining on schedule, totaling around 6 million shares year to date.
Top Line in Detail
Fortive operates under the following three organized segments:
Intelligent Operating Solutions: The segment generated revenues of $661.2 million (contributing 43.1% to total revenues), up 2.6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $550.9 million (35.9%), down 0.3% year over year. It is experiencing double-digit order growth.
Advanced Healthcare Solutions: This segment registered revenues of $322.5 million (21%), up 8.3% year over year.
Operating Details
In the reported quarter, gross profit increased 3.2% to $921.3 million on a year-over-year basis.
Adjusted operating margin was 27%, extending 90 bps on a year-over-year basis. Segment-wise, the adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 32.5% and 26.4%, contracting 50 bps and 70 bps, respectively, year over year.
Advanced Healthcare Solutions’ adjusted operating margin of 26.7% rose 310 bps.
Balance Sheet & Cash Flow
As of Sept 27, 2024, cash and cash equivalents were $811.3 million compared with $644.1 million as of June 28.
As of Sept 27, 2024, accounts receivables were $912.2 million compared with $934.5 million as of June 28.
FTV generated an operating cash flow of $459 million for the third quarter compared with $308.9 million in the previous quarter. Non-GAAP free cash flow was $431.2 million compared with $279.7 million in the prior quarter. The company encountered shipment delays that shifted approximately $15 million in deliveries out of the third quarter.
Badger Meter, Inc. (BMI - Free Report) reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.
Iridium Communications (IRDM - Free Report) reported earnings per share of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of 1 cent per share in the prior-year quarter.
Seagate Technology Holdings plc (STX - Free Report) reported first-quarter fiscal 2025 non-GAAP earnings of $1.58 per share, beating the Zacks Consensus Estimate by 6.8%. Non-GAAP revenues of $2.168 billion beat the Zacks Consensus Estimate by 2.4%. The figure increased 49% on a year-over-year basis.
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Fortive Q3 Earnings Beat Estimates, Revenues Up Y/Y, Outlook Raised
Fortive Corporation (FTV - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of 97 cents, which topped the Zacks Consensus Estimate by 4.3%. The bottom line increased 14.12% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar
Revenues rose 2.7% year over year to $1.54 billion. However, the top line missed the Zacks Consensus Estimate by 0.8%. Core revenues rose 1% year over year.
The year-over-year improvement in the top line was driven by continued momentum in Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS) along with the orders growth across all segments.
The software business segment experienced high single-digit growth in annual recurring revenues (ARR), while hardware orders were significantly bolstered by subsidiaries Fluke and Tektronix. Fluke introduced five major products in September, leading to a notable increase in orders across most regions. Meanwhile, investments in AI applications are fueling Tektronix’s expansion.
The company raised guidance for 2024 expecting double-digit growth in both earnings and cash flow in 2024. Revenues are now anticipated to be between $6.24 billion and $6.26 billion compared with the previous guidance of $6.25 billion and $6.3 billion, indicating 3% growth from the year-ago level. The Zacks Consensus Estimate is pegged at $6.28 billion.
Fortive Corporation Price and Consensus
Fortive Corporation price-consensus-chart | Fortive Corporation Quote
Management now projects adjusted net EPS between $3.84 and $3.87 compared with the previous guidance of $3.80 and $3.86. The Zacks Consensus Estimate is pegged at $3.82.Core revenue growth is anticipated to be 1% for the fourth quarter and the full year. Free cash flow is forecasted to be $1.365 million. For fourth-quarter 2024, adjusted net EPS is estimated to be in the range of $1.11-$1.14. Revenues are expected in the $1.63-$1.65 billion band. The Zacks Consensus Estimate for fourth-quarter EPS and revenues is pegged at 93 cents and $1.55 billion, respectively. Free cash flow is forecasted to be $425 million.
Fortive ramped up its share buyback initiative by repurchasing around 4 million shares in the third quarter, with the anticipated spin-off remaining on schedule, totaling around 6 million shares year to date.
Top Line in Detail
Fortive operates under the following three organized segments:
Intelligent Operating Solutions: The segment generated revenues of $661.2 million (contributing 43.1% to total revenues), up 2.6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $550.9 million (35.9%), down 0.3% year over year. It is experiencing double-digit order growth.
Advanced Healthcare Solutions: This segment registered revenues of $322.5 million (21%), up 8.3% year over year.
Operating Details
In the reported quarter, gross profit increased 3.2% to $921.3 million on a year-over-year basis.
Adjusted operating margin was 27%, extending 90 bps on a year-over-year basis.
Segment-wise, the adjusted operating margins of Intelligent Operating Solutions and Precision Technologies were 32.5% and 26.4%, contracting 50 bps and 70 bps, respectively, year over year.
Advanced Healthcare Solutions’ adjusted operating margin of 26.7% rose 310 bps.
Balance Sheet & Cash Flow
As of Sept 27, 2024, cash and cash equivalents were $811.3 million compared with $644.1 million as of June 28.
As of Sept 27, 2024, accounts receivables were $912.2 million compared with $934.5 million as of June 28.
FTV generated an operating cash flow of $459 million for the third quarter compared with $308.9 million in the previous quarter. Non-GAAP free cash flow was $431.2 million compared with $279.7 million in the prior quarter. The company encountered shipment delays that shifted approximately $15 million in deliveries out of the third quarter.
Zacks Rank
Currently, Fortive has a Zacks Rank #2 (Buy).Shares of the company have gained 11% in the past year compared with the sub-industry's growth of 23.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Performance of Some Other Companies in Tech Space
Badger Meter, Inc. (BMI - Free Report) reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.
Iridium Communications (IRDM - Free Report) reported earnings per share of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of 1 cent per share in the prior-year quarter.
Seagate Technology Holdings plc (STX - Free Report) reported first-quarter fiscal 2025 non-GAAP earnings of $1.58 per share, beating the Zacks Consensus Estimate by 6.8%. Non-GAAP revenues of $2.168 billion beat the Zacks Consensus Estimate by 2.4%. The figure increased 49% on a year-over-year basis.