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Pentair (PNR) Earnings Surpass Estimates in Q4, Decline Y/Y

Pentair Plc. PNR has reported fourth-quarter 2022 adjusted earnings per share (EPS) of 82 cents, beating the Zacks Consensus Estimate of 79 cents per share. The bottom line surpassed the company’s guidance of 79 cents. However, the same declined 6% from the 87 cents reported in the prior year.

Including one-time items, EPS was 58 cents compared with the prior-year quarter’s 89 cents.

Net sales improved 1.4% year over year to $1 billion in the quarter under review and topped the Zacks Consensus Estimate of $995 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 3% in the quarter.

The cost of sales advanced 2.7% year over year to $678 million. The gross profit in the reported quarter amounted to $325 million, down 1.1% from the prior-year quarter. The gross margin was 32.4% compared with the year-ago quarter’s 33.2%.
SG&A expenses totaled $190 million, which rose 21.6% from the prior-year quarter’s $156 million. Research and development expenses were up 7.4% year over year to $23.1 million.

The operating income in the quarter was $112 million, down 26% year over year. The adjusted segmental operating income increased 10% year over year to $183 million. The segment margin was 18.2% in the reported quarter, a 130 basis-point expansion from the year-ago quarter.

Pentair plc Price, Consensus and EPS Surprise

 

Pentair plc price-consensus-eps-surprise-chart | Pentair plc Quote

Segmental Performance

Net sales in the Consumer Solutions segment fell 0.5% year over year to $627 million. The segment’s operating earnings increased 7% year over year to $145 million.

Net sales in the Industrial and Flow Technologies segment totaled $376 million, up 5% from the prior-year quarter. Operating earnings for the segment rose 21% year over year to $65 million.

Financial Update

Pentair had cash and cash equivalents of around $109 million at the end of 2022 compared with $94.5 million at 2021-end. Net cash generated from operating activities was $364.3 million in 2022 compared with $613.6 million in the prior year. The company had long-term debt of $2,317 million as of Dec 31, 2022, up from $894 million as of Dec 31, 2021.

Fiscal 2022 Performance

For fiscal 2022, Pentair’s adjusted earnings were $3.68, which beat the Zacks Consensus Estimate of $3.65. It marked an 8.2% improvement from the prior year. The company’s guidance for adjusted EPS guidance for 2022 was $3.65. Including one-time items, the company’s earnings from continuing operations were $2.92 per share in 2022 compared with $3.32 in 2021.

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Total revenues advanced 9% year over year to $4.1 billion, in line with the Zacks Consensus Estimate. Excluding currency translation, acquisitions and divestitures, core sales were up 6% in 2022.

Guidance

Pentair expects adjusted EPS for 2023 between $3.50 and $3.70. The company projects 2023 sales to be down 3% to up 1% on a reported basis.

For the first quarter of 2023, PNR expects adjusted EPS at 76-78 cents. The company anticipates first-quarter sales to be flat to up 1% on a reported basis from that reported in first-quarter 2022.

Price Performance

Pentair’s stock has lost 20.4% over the past year compared with the industry’s fall of 33.4%.

 

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Zacks Rank and Stocks to Consider

Pentair currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are KnowBe4, Inc. KNBE, O-I Glass, Inc. OI, and Deere & Company DE. KNBE and OI flaunt a Zacks Rank #1 (Strong Buy) at present, and DE has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 24 cents, indicating a year-over-year increase of 127.3%. The consensus estimate for 2022 earnings has moved up 9% in the past 60 days. KNBE’s shares have gained 4% in a year.

O-I Glass has an average trailing four-quarter earnings surprise of 14.9%. The Zacks Consensus Estimate for OI’s 2022 earnings is pegged at $2.25 per share. This indicates a 22.9% increase from the prior-year reported figure. The consensus estimate for 2022 earnings has been unchanged in the past 60 days. OI’s shares gained 41% in the last year.

The Zacks Consensus Estimate for Deere & Company’s fiscal 2023 earnings per share is pegged at $28.01, suggesting an increase of 19.6% from that reported in the last year. The consensus estimate for fiscal 2023 earnings has moved 2.7% upward in the last 60 days. DE has a trailing four-quarter average earnings surprise of 7.1%. Its shares gained 11.7% in the last year.

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