LONDON - Pentair plc (NYSE:PNR), a global leader in water treatment solutions, reported a robust second quarter with earnings surpassing analyst expectations and an upward revision to its full-year guidance.
The company's adjusted EPS for Q2 stood at $1.22, $0.08 higher than the consensus estimate of $1.14. Revenue also exceeded forecasts, coming in at $1.1 billion against the predicted $1.09 billion, marking a 2% increase from the previous year.
President and CEO John L. Stauch attributed the strong quarter to diligent execution across Pentair's diverse water portfolio, highlighting the pool segment's return to sales growth and significant margin expansion across all segments. Stauch expressed confidence in the company's long-term growth and margin targets, underpinned by their Transformation and 80/20 initiatives.
For the full year 2024, Pentair has raised its adjusted EPS guidance to approximately $4.25, a 13% increase from 2023 and above the analyst consensus of $4.16. The company anticipates full-year sales to be relatively stable, with expectations of a flat to 1% decrease on a reported basis.
Looking ahead to the third quarter of 2024, Pentair introduced GAAP EPS guidance of $0.99 to $1.01 and an adjusted EPS forecast of $1.06 to $1.08, representing a 13% to 15% rise from the same period last year. However, Q3 sales are projected to decline by about 2% to 3% on a reported basis compared to Q3 of 2023.
The company's operational achievements in Q2 included a 19% increase in operating income to $248 million, reflecting a return on sales (ROS) of 22.6%, up 330 basis points from the second quarter of 2023. Adjusted operating income also saw a 16% year-over-year increase to $271 million, with adjusted ROS expanding to 24.7%.
Pentair's financial health was further underscored by a substantial increase in net cash provided by operating activities, which rose by $93 million from the previous year to $539 million. Free cash flow also saw a significant boost, increasing by $90 million to $522 million.
As part of its commitment to shareholder returns, Pentair continued its track record of dividend growth, marking the 48th consecutive year of dividend increases. The company also resumed share repurchases, buying back 0.6 million shares for $50 million during the quarter.
Stauch concluded with a positive outlook, emphasizing Pentair's strategic focus on long-term growth and resilience in the face of global uncertainties. He reiterated the company's commitment to capitalizing on favorable trends in water sustainability and infrastructure, positioning Pentair to thrive in the evolving market landscape.
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