Pentair Reports Strong First Quarter 2024 Results
- None.
- None.
Insights
Pentair's first quarter report indicates a slight downtrend in overall sales, with a
Operational income has also seen a minor dip of
Furthermore, the company's commitment to shareholder returns is evident through its consistent dividend payouts, marking the 48th consecutive year of dividend increases. This exhibits a strong free cash flow position and management's confidence in the company's long-term financial stability, which is important for long-term investors.
Looking at Pentair's portfolio spread across various water-related segments, we see differing performance metrics. The Flow segment, despite a
The projected full year guidance, along with a positive second-quarter outlook, suggests management's anticipations of favorable market conditions and effective strategy implementation. This steadfast outlook, despite global economic uncertainties, is a positive indicator for investors considering the company's ability to navigate through macroeconomic challenges.
From an investment perspective, the revenue stability and margin expansion detailed in Pentair's report could be seen as a harbinger of robust operational management. The update in GAAP EPS guidance to
Overall, Pentair’s solid dividend track record and the latest financial outcomes could reinforce investor confidence in the company's ability to generate value in the long term. However, potential investors should remain cautious and consider the broader macroeconomic context, including the impact of currency translation and the dynamics within each of Pentair's operational segments, before making investment decisions.
-
Sales of
$1.0 billion -
Operating income of
$181 million -
GAAP EPS of
$0.80 $0.94 -
The company updates its full year 2024 GAAP EPS guidance to approximately
$3.76 $3.86 $4.15 $4.25
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
John L. Stauch, Pentair’s President and Chief Executive Officer commented: “Our balanced water portfolio delivered strong first quarter results that exceeded our expectations. For the first time in nearly four years, we are pleased to be entering what we believe to be a more normal operating environment. Order rates remained solid and our backlog and lead times have been normalizing. Our Transformation initiatives remained on track and continue to fuel our return on sales goal of 24 percent with potential upside by the end of fiscal 2026 as we highlighted at our recent Investor Day.”
First quarter 2024 operating income was
Flow sales were down 2 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 2 percent in the first quarter. Segment income of
Water Solutions sales were flat compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales increased 1 percent in the first quarter. Segment income of
Pool sales were down 1 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 1 percent in the first quarter. Segment income of
Net cash used for operating activities of continuing operations was
Pentair paid a regular cash dividend of
OUTLOOK
Mr. Stauch concluded, “We are reiterating our full year outlook and introducing strong Q2 guidance reflecting solid execution across all three segments while being mindful of the uncertainty across the global macroeconomic and geopolitical landscape. We continue to focus on investing in the long-term growth of Pentair and remain confident in our balanced water portfolio and Transformation initiatives.”
The company updates its estimated 2024 GAAP EPS from continuing operations to approximately
In addition, the company introduces second quarter 2024 GAAP EPS from continuing operations guidance of approximately
EARNINGS CONFERENCE CALL
Pentair President and Chief Executive Officer John L. Stauch and Chief Financial Officer Robert P. Fishman will discuss the company’s first quarter 2024 results on a conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investor Relations section of the Company’s website, www.pentair.com, shortly before the call begins.
Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentations, each of which can be found on Pentair’s website. The webcast and presentations will be archived at the Company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release contains statements that we believe to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “could,” “positioned,” “strategy,” or “future” or words, phrases, or terms of similar substance or the negative thereof are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the overall global economic and business conditions impacting our business, including the strength of housing and related markets and conditions relating to international hostilities; supply, demand, logistics, competition and pricing pressures related to and in the markets we serve; the ability to achieve the benefits of our restructuring plans, cost reduction initiatives and Transformation Program; the impact of raw material, logistics and labor costs and other inflation; volatility in currency exchange rates and interest rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; risks associated with operating foreign businesses; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit
ABOUT PENTAIR PLC
At Pentair, we help the world sustainably move, improve and enjoy water, life’s most essential resource. From our residential and commercial water solutions, to industrial water management and everything in between, Pentair is focused on smart, sustainable water solutions that help our planet and people thrive.
Pentair had revenue in 2023 of approximately
Pentair plc and Subsidiaries |
||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||
|
|
|
||||
|
Three months ended |
|||||
In millions, except per-share data |
March 31,
|
March 31,
|
||||
Net sales |
$ |
1,017.2 |
|
$ |
1,028.6 |
|
Cost of goods sold |
|
627.1 |
|
|
646.8 |
|
Gross profit |
|
390.1 |
|
|
381.8 |
|
% of net sales |
|
38.4 |
% |
|
37.1 |
% |
Selling, general and administrative expenses |
|
185.2 |
|
|
173.3 |
|
% of net sales |
|
18.2 |
% |
|
16.8 |
% |
Research and development expenses |
|
24.1 |
|
|
24.9 |
|
% of net sales |
|
2.4 |
% |
|
2.4 |
% |
Operating income |
|
180.8 |
|
|
183.6 |
|
% of net sales |
|
17.8 |
% |
|
17.8 |
% |
Other expense |
|
|
||||
Other expense |
|
0.1 |
|
|
0.7 |
|
Net interest expense |
|
27.3 |
|
|
32.4 |
|
% of net sales |
|
2.7 |
% |
|
3.1 |
% |
Income from continuing operations before income taxes |
|
153.4 |
|
|
150.5 |
|
Provision for income taxes |
|
19.9 |
|
|
22.0 |
|
Effective tax rate |
|
13.0 |
% |
|
14.6 |
% |
Net income from continuing operations |
|
133.5 |
|
|
128.5 |
|
(Loss) income from discontinued operations, net of tax |
|
(0.2 |
) |
|
1.2 |
|
Net income |
$ |
133.3 |
|
$ |
129.7 |
|
Earnings per ordinary share |
|
|
||||
Basic |
|
|
||||
Continuing operations |
$ |
0.80 |
|
$ |
0.78 |
|
Discontinued operations |
|
— |
|
|
0.01 |
|
Basic earnings per ordinary share |
$ |
0.80 |
|
$ |
0.79 |
|
Diluted |
|
|
||||
Continuing operations |
$ |
0.80 |
|
$ |
0.78 |
|
Discontinued operations |
|
— |
|
|
0.01 |
|
Diluted earnings per ordinary share |
$ |
0.80 |
|
$ |
0.79 |
|
Weighted average ordinary shares outstanding |
|
|
||||
Basic |
|
165.7 |
|
|
164.8 |
|
Diluted |
|
167.2 |
|
|
165.8 |
|
Cash dividends paid per ordinary share |
$ |
0.23 |
|
$ |
0.22 |
|
Pentair plc and Subsidiaries |
||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||
|
|
|
||
|
March 31,
|
December 31,
|
||
In millions |
||||
Assets |
||||
Current assets |
|
|
||
Cash and cash equivalents |
$ |
109.1 |
$ |
170.3 |
Accounts receivable, net |
|
807.4 |
|
561.7 |
Inventories |
|
675.1 |
|
677.7 |
Other current assets |
|
157.0 |
|
159.3 |
Total current assets |
|
1,748.6 |
|
1,569.0 |
Property, plant and equipment, net |
|
363.1 |
|
362.0 |
Other assets |
|
|
||
Goodwill |
|
3,255.8 |
|
3,274.6 |
Intangibles, net |
|
1,026.2 |
|
1,042.4 |
Other non-current assets |
|
345.0 |
|
315.3 |
Total other assets |
|
4,627.0 |
|
4,632.3 |
Total assets |
$ |
6,738.7 |
$ |
6,563.3 |
Liabilities and Equity |
||||
Current liabilities |
|
|
||
Accounts payable |
$ |
308.8 |
$ |
278.9 |
Employee compensation and benefits |
|
96.0 |
|
125.4 |
Other current liabilities |
|
514.5 |
|
545.3 |
Total current liabilities |
|
919.3 |
|
949.6 |
Other liabilities |
|
|
||
Long-term debt |
|
2,084.3 |
|
1,988.3 |
Pension and other post-retirement compensation and benefits |
|
73.1 |
|
73.6 |
Deferred tax liabilities |
|
39.0 |
|
40.0 |
Other non-current liabilities |
|
295.8 |
|
294.7 |
Total liabilities |
|
3,411.5 |
|
3,346.2 |
Equity |
|
3,327.2 |
|
3,217.1 |
Total liabilities and equity |
$ |
6,738.7 |
$ |
6,563.3 |
Pentair plc and Subsidiaries |
||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||
|
||||||
|
Three months ended |
|||||
In millions |
March 31,
|
March 31,
|
||||
Operating activities |
|
|
||||
Net income |
$ |
133.3 |
|
$ |
129.7 |
|
Loss (income) from discontinued operations, net of tax |
|
0.2 |
|
|
(1.2 |
) |
Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities |
|
|
||||
Equity income of unconsolidated subsidiaries |
|
(0.9 |
) |
|
(0.2 |
) |
Depreciation |
|
14.9 |
|
|
14.7 |
|
Amortization |
|
13.5 |
|
|
13.8 |
|
Deferred income taxes |
|
4.8 |
|
|
(14.0 |
) |
Share-based compensation |
|
7.9 |
|
|
7.2 |
|
Asset impairment and write-offs |
|
0.8 |
|
|
4.1 |
|
Changes in assets and liabilities, net of effects of business acquisitions |
|
|
||||
Accounts receivable |
|
(249.5 |
) |
|
(184.8 |
) |
Inventories |
|
(3.2 |
) |
|
6.0 |
|
Other current assets |
|
(11.8 |
) |
|
(17.4 |
) |
Accounts payable |
|
33.0 |
|
|
(24.9 |
) |
Employee compensation and benefits |
|
(28.3 |
) |
|
(12.8 |
) |
Other current liabilities |
|
(28.1 |
) |
|
(28.7 |
) |
Other non-current assets and liabilities |
|
6.0 |
|
|
1.9 |
|
Net cash used for operating activities of continuing operations |
|
(107.4 |
) |
|
(106.6 |
) |
Net cash used for operating activities of discontinued operations |
|
(0.2 |
) |
|
— |
|
Net cash used for operating activities |
|
(107.6 |
) |
|
(106.6 |
) |
Investing activities |
|
|
||||
Capital expenditures |
|
(19.3 |
) |
|
(16.6 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
0.2 |
|
Acquisitions, net of cash acquired |
|
— |
|
|
0.2 |
|
Net cash used for investing activities |
|
(19.3 |
) |
|
(16.2 |
) |
Financing activities |
|
|
||||
Net borrowings of revolving long-term debt |
|
101.4 |
|
|
173.6 |
|
Repayments of long-term debt |
|
(6.3 |
) |
|
— |
|
Shares issued to employees, net of shares withheld |
|
6.1 |
|
|
(4.1 |
) |
Dividends paid |
|
(38.0 |
) |
|
(36.2 |
) |
Net cash provided by financing activities |
|
63.2 |
|
|
133.3 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
2.5 |
|
|
(0.2 |
) |
Change in cash and cash equivalents |
|
(61.2 |
) |
|
10.3 |
|
Cash and cash equivalents, beginning of period |
|
170.3 |
|
|
108.9 |
|
Cash and cash equivalents, end of period |
$ |
109.1 |
|
$ |
119.2 |
|
|
|
|
||||
Pentair plc and Subsidiaries |
||||||
Reconciliation of the GAAP Operating Activities Cash Flow to the Non-GAAP Free Cash Flow (Unaudited) |
||||||
|
||||||
|
Three months
|
Three months
|
||||
In millions |
March 31,
|
March 31,
|
||||
Net cash used for operating activities of continuing operations |
$ |
(107.4 |
) |
$ |
(106.6 |
) |
Capital expenditures |
|
(19.3 |
) |
|
(16.6 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
0.2 |
|
Free cash flow from continuing operations |
|
(126.7 |
) |
|
(123.0 |
) |
Net cash used for operating activities of discontinued operations |
|
(0.2 |
) |
|
— |
|
Free cash flow |
$ |
(126.9 |
) |
$ |
(123.0 |
) |
|
|
|
||||
Pentair plc and Subsidiaries |
||||||
Supplemental Financial Information by Reportable Segment (Unaudited) |
||||||
|
|
|
||||
|
|
2024 |
|
|
2023 |
|
In millions |
First
|
First
|
||||
Net sales |
|
|
||||
Flow |
$ |
384.3 |
|
$ |
391.8 |
|
Water Solutions |
|
273.1 |
|
|
272.0 |
|
Pool |
|
359.5 |
|
|
364.3 |
|
Other |
|
0.3 |
|
|
0.5 |
|
Consolidated |
$ |
1,017.2 |
|
$ |
1,028.6 |
|
Segment income (loss) |
|
|
||||
Flow |
$ |
77.3 |
|
$ |
65.0 |
|
Water Solutions |
|
55.6 |
|
|
52.4 |
|
Pool |
|
110.8 |
|
|
116.2 |
|
Other |
|
(26.4 |
) |
|
(22.6 |
) |
Consolidated |
$ |
217.3 |
|
$ |
211.0 |
|
Return on sales |
|
|
||||
Flow |
|
20.1 |
% |
|
16.6 |
% |
Water Solutions |
|
20.4 |
% |
|
19.3 |
% |
Pool |
|
30.8 |
% |
|
31.9 |
% |
Consolidated adjusted return on sales |
|
21.4 |
% |
|
20.5 |
% |
|
|
|
||||
Pentair plc and Subsidiaries |
|||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending December 31, 2024 |
|||||||||
Excluding the Effect of Adjustments (Unaudited) |
|||||||||
|
|
|
|
|
|
||||
|
Actual |
Forecast |
|||||||
In millions, except per-share data |
First
|
Second
|
Full
|
||||||
Net sales |
$ |
1,017.2 |
|
approx |
Up |
approx |
Up |
||
Operating income |
|
180.8 |
|
approx |
Up |
approx |
Up |
||
Return on sales |
|
17.8 |
% |
|
|
|
|
||
Adjustments: |
|
|
|
|
|
||||
Restructuring and other |
|
4.6 |
|
approx |
$ |
— |
approx |
$ |
5 |
Transformation costs |
|
17.0 |
|
approx |
|
— |
approx |
|
17 |
Intangible amortization |
|
13.5 |
|
approx |
|
14 |
approx |
|
55 |
Legal accrual adjustments and settlements |
|
(0.3 |
) |
approx |
|
— |
approx |
|
— |
Asset impairment and write-offs |
|
0.8 |
|
approx |
|
— |
approx |
|
1 |
Equity income of unconsolidated subsidiaries |
|
0.9 |
|
approx |
|
1 |
approx |
|
4 |
Segment income |
|
217.3 |
|
approx |
Up |
approx |
Up |
||
Adjusted return on sales |
|
21.4 |
% |
|
|
|
|
||
Net income from continuing operations—as reported |
|
133.5 |
|
approx |
|
approx |
|
||
Adjustments to operating income |
|
35.6 |
|
approx |
|
14 |
approx |
|
78 |
Income tax adjustments |
|
(11.3 |
) |
approx |
|
(2) |
approx |
|
(13) |
Net income from continuing operations—as adjusted |
$ |
157.8 |
|
approx |
|
approx |
|
||
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
||||
Diluted earnings per ordinary share—as reported |
$ |
0.80 |
|
approx |
|
approx |
|
||
Adjustments |
|
0.14 |
|
approx |
|
0.07 |
approx |
|
0.39 |
Diluted earnings per ordinary share—as adjusted |
$ |
0.94 |
|
approx |
|
approx |
|
||
Pentair plc and Subsidiaries |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2023 |
|||||||||||||||
Excluding the Effect of Adjustments (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
In millions, except per-share data |
First
|
Second
|
Third
|
Fourth
|
Full
|
||||||||||
Net sales |
$ |
1,028.6 |
|
$ |
1,082.5 |
|
$ |
1,008.8 |
|
$ |
984.6 |
|
$ |
4,104.5 |
|
Operating income |
|
183.6 |
|
|
208.5 |
|
|
180.1 |
|
|
167.0 |
|
|
739.2 |
|
Return on sales |
|
17.8 |
% |
|
19.3 |
% |
|
17.9 |
% |
|
17.0 |
% |
|
18.0 |
% |
Adjustments: |
|
|
|
|
|
||||||||||
Restructuring and other |
|
2.9 |
|
|
0.6 |
|
|
1.6 |
|
|
(1.7 |
) |
|
3.4 |
|
Transformation costs |
|
8.5 |
|
|
6.0 |
|
|
13.5 |
|
|
16.3 |
|
|
44.3 |
|
Intangible amortization |
|
13.8 |
|
|
13.9 |
|
|
13.8 |
|
|
13.8 |
|
|
55.3 |
|
Legal accrual adjustments and settlements |
|
(1.9 |
) |
|
4.1 |
|
|
— |
|
|
— |
|
|
2.2 |
|
Asset impairment and write-offs |
|
3.9 |
|
|
0.5 |
|
|
1.8 |
|
|
1.7 |
|
|
7.9 |
|
Equity income of unconsolidated subsidiaries |
|
0.2 |
|
|
0.6 |
|
|
1.3 |
|
|
0.7 |
|
|
2.8 |
|
Segment income |
|
211.0 |
|
|
234.2 |
|
|
212.1 |
|
|
197.8 |
|
|
855.1 |
|
Adjusted return on sales |
|
20.5 |
% |
|
21.6 |
% |
|
21.0 |
% |
|
20.1 |
% |
|
20.8 |
% |
Net income from continuing operations—as reported |
|
128.5 |
|
|
154.2 |
|
|
132.1 |
|
|
208.1 |
|
|
622.9 |
|
Pension and other post retirement mark to market loss |
|
— |
|
|
— |
|
|
— |
|
|
6.1 |
|
|
6.1 |
|
Other income |
|
— |
|
|
(5.1 |
) |
|
— |
|
|
— |
|
|
(5.1 |
) |
Adjustments to operating income |
|
27.2 |
|
|
25.1 |
|
|
30.7 |
|
|
30.1 |
|
|
113.1 |
|
Income tax adjustments (1) |
|
(4.6 |
) |
|
(3.1 |
) |
|
(6.6 |
) |
|
(98.5 |
) |
|
(112.8 |
) |
Net income from continuing operations—as adjusted |
$ |
151.1 |
|
$ |
171.1 |
|
$ |
156.2 |
|
$ |
145.8 |
|
$ |
624.2 |
|
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
||||||||||
Diluted earnings per ordinary share—as reported |
$ |
0.78 |
|
$ |
0.93 |
|
$ |
0.79 |
|
$ |
1.25 |
|
$ |
3.75 |
|
Adjustments |
|
0.13 |
|
|
0.10 |
|
|
0.15 |
|
|
(0.38 |
) |
|
— |
|
Diluted earnings per ordinary share—as adjusted |
$ |
0.91 |
|
$ |
1.03 |
|
$ |
0.94 |
|
$ |
0.87 |
|
$ |
3.75 |
|
(1) |
Income tax adjustments in the fourth quarter include |
|
Pentair plc and Subsidiaries |
||||||
Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment |
||||||
For the Quarter Ended March 31, 2024 (Unaudited) |
||||||
|
||||||
|
Q1 Net Sales Growth |
|||||
|
Core |
Currency |
Total |
|||
Total Pentair |
(1.1 |
)% |
— |
% |
(1.1 |
)% |
Flow |
(2.1 |
)% |
0.2 |
% |
(1.9 |
)% |
Water Solutions |
0.8 |
% |
(0.4 |
)% |
0.4 |
% |
Pool |
(1.3 |
)% |
— |
% |
(1.3 |
)% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240423455477/en/
Shelly Hubbard
Vice President, Investor Relations
Direct: 612-812-0148
Email: shelly.hubbard@pentair.com
Rebecca Osborn
Sr. Director, External Communications
Direct: 763-656-5589
Email: rebecca.osborn@pentair.com
Source: Pentair plc
FAQ
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