Pentair PLC (PNR, Financial) released its 8-K filing on July 23, 2024, reporting robust second-quarter results. Pentair, a global leader in the water treatment industry, operates in three segments: pool, water technologies, and flow. The company generated approximately $4.1 billion in revenue in 2023.
Quarterly Performance Overview
Pentair reported second-quarter 2024 sales of $1.1 billion, a 2% increase compared to the same period last year. This aligns closely with the analyst revenue estimate of $1,094.88 million. The company's GAAP earnings per share (EPS) rose 19% to $1.11, surpassing the analyst estimate of $1.08. On an adjusted basis, EPS increased 18% to $1.22.
Segment Analysis
The pool segment was a standout performer, with sales up 17% year-over-year. Excluding currency translation, acquisitions, and divestitures, core sales grew 18%. Reportable segment income for the pool segment rose 27% to $134 million, with a return on sales (ROS) of 34.1%, an increase of 270 basis points.
Conversely, the flow and water solutions segments faced challenges. Flow sales declined 4%, and water solutions sales dropped 8% compared to the same period last year. Despite these declines, both segments saw improvements in ROS, indicating better operational efficiency.
Financial Achievements
Operating income for the quarter was $248 million, a 19% increase from the second quarter of 2023, reflecting a ROS of 22.6%, up 330 basis points. On an adjusted basis, operating income was $271 million, up 16%, with an adjusted ROS of 24.7%, an increase of 310 basis points.
Net cash provided by operating activities of continuing operations was $539 million, a $93 million increase from the same period last year. Free cash flow for the quarter was $522 million, up $90 million year-over-year.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1,099.3 million | $1,082.5 million |
| Gross Profit | $437.9 million | $399.5 million |
| Operating Income | $248.0 million | $208.5 million |
| Net Income | $186.1 million | $152.9 million |
| GAAP EPS | $1.11 | $0.93 |
| Adjusted EPS | $1.22 | $1.03 |
Balance Sheet and Cash Flow
As of June 30, 2024, Pentair's total assets were $6.55 billion, with total liabilities of $3.12 billion and equity of $3.43 billion. The company maintained a strong cash position with $214.3 million in cash and cash equivalents, up from $170.3 million at the end of 2023.
Net cash provided by operating activities for the first half of 2024 was $431.8 million, compared to $340.1 million for the same period in 2023. Free cash flow for the first half of 2024 was $395.5 million, up from $309.7 million in the first half of 2023.
Commentary and Outlook
"We delivered a strong second quarter driven by continued execution across our balanced water portfolio. Our pool segment returned to sales growth and all three of our segments drove significant margin expansion due primarily to strong productivity in Transformation," said John L. Stauch, Pentair’s President and Chief Executive Officer.
Pentair updated its full-year 2024 GAAP EPS guidance to approximately $3.81 and adjusted EPS to approximately $4.25. The company also introduced third-quarter 2024 GAAP EPS guidance of $0.99 to $1.01 and adjusted EPS guidance of $1.06 to $1.08.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Pentair PLC for further details.
