Summary of Fortive (FTV) 2025 Conference Call Company Overview - **Company**: Fortive Corporation - **Upcoming Spin-off**: Fortive is set to spin off its precision technology segment as Ralliant by the end of Q2 2025 [1] Key Industry Insights Sensors and Safety - **Revenue Contribution**: Sensors and safety systems account for 56% of Ralliant's revenue [5] - **Growth Factors**: - **Utility Sector**: There is an expansion phase due to increased electricity demand and aging infrastructure, which is beneficial for sensor business related to transformers and the electric grid [6] - **Defense Technologies**: Strong backlog in the PACSCI EMC business, with global replenishment of production programs [6] - **Niche Applications**: Some resilience observed in harsh and regulated environments, although this segment has been slow [7] Test and Measurement - **Revenue Contribution**: Test and measurement segment represents 44% of revenue [12] - **Market Performance**: - **Diversified Electronics**: Largest market, currently down due to softness in EV and battery energy storage [16] - **Semiconductors**: Continued strength in data center-related products [16] - **Communications**: Softness observed in Europe, particularly in government contracts [18][21] Software Segment - **Revenue Contribution**: Software constitutes about 20% of new Fortive's revenue, with mid-single-digit growth reported [40][41] - **Recurring Revenue**: Approximately 50% of new Fortive's revenue is recurring, split between software and healthcare consumables [41] Financial Performance - **Q1 Performance**: Fortive reported 2% core growth and 80 basis points of year-over-year margin expansion [40] - **EBITDA Margins**: Ralliant is expected to have a pro forma EBITDA margin of 22%, while test and measurement is in the high teens [33] Strategic Initiatives - **Product Development**: Emphasis on investing in new product development to drive organic growth [60] - **Capital Allocation**: Fortive is generating approximately $1 billion in free cash flow annually, with plans to explore acquisitions and investments in high-potential areas [64][66] Market Trends and Challenges - **Tariff Impact**: Tariff mitigation strategies include dual sourcing and shifting production, with only 1% of sales impacted by tariffs from the US to China [89][90] - **European Market**: Cautious optimism regarding recovery in Europe, particularly in Germany, with expectations of a longer timeline for significant improvements [101][103] Additional Insights - **Innovation in Healthcare**: Long-term trends in healthcare demand driven by aging populations and the need for better access to quality care [47] - **SaaS Growth**: Strong growth in SaaS offerings, particularly in healthcare, is expected to be a major growth driver [51][53] Conclusion Fortive is positioned for growth through strategic investments in product development, a strong focus on recurring revenue from software, and a proactive approach to market challenges such as tariffs and supply chain dynamics. The upcoming spin-off of Ralliant is anticipated to unlock further value for shareholders.

Group 1 - Fortive Corporation (FTV) is experiencing significant activity in the options market, particularly with the September 19, 2025 $40 Call option showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to either a rally or a sell-off [2] - Fortive currently holds a Zacks Rank 3 (Hold) in the Electronics - Testing Equipment industry, which is in the top 38% of the Zacks Industry Rank, but analysts have lowered earnings estimates for the current quarter from $1 per share to 92 cents [3] Group 2 - The high implied volatility surrounding Fortive's options may indicate a developing trading opportunity, as seasoned traders often seek to sell premium on options with high implied volatility to capture decay [4]

Core Insights - Fortive Corporation reported first-quarter 2025 adjusted EPS of 85 cents, in line with estimates, with a year-over-year increase of 2.4% [1] - Revenues declined 3.3% year over year to $1.47 billion, missing estimates by 1.2%, with core revenues down 1.7% [1] - The decline in revenues was primarily due to weakness in the Precision Technologies segment, partially offset by growth in Intelligent Operating Solutions and Advanced Healthcare Solutions [1] Financial Performance - Intelligent Operating Solutions generated revenues of $671.4 million, contributing 45.5% to total revenues, up 0.9% year over year [5] - Precision Technologies reported revenues of $500.6 million, down 10.5% year over year, affected by tough comparisons and customer order delays [6] - Advanced Healthcare Solutions achieved revenues of $302.2 million, up 0.8% year over year [6] - Gross profit decreased 3.1% to $880.9 million, with an adjusted operating margin of 25.3%, an increase of 20 basis points year over year [7] Strategic Developments - Fortive announced plans to separate its Precision Technologies business into an independent company, Ralliant, expected to be completed by the end of Q2 2025 [2] - The separation aims to create two focused companies, with Fortive concentrating on IOS and AHS, while Ralliant will specialize in precision instruments [2] - Management revised 2025 guidance due to delayed recovery in Precision Technologies and global tariffs, expecting adjusted diluted EPS to be $3.80 to $4 [3][10] Outlook - For Q2 2025, core performance in Precision Technologies is expected to decline, while the "New Fortive" is anticipated to maintain steady growth [12] - Adjusted EPS for Q2 is projected to be between 85 cents and 90 cents, with the Zacks Consensus Estimate at 99 cents [12] - The company is maintaining its core growth outlook for the "New Fortive," despite potential subdued demand in certain areas [11]

Financial Data and Key Metrics Changes - Fortive reported adjusted earnings per share of $0.85, which is in line with expectations, reflecting a 2% year-over-year growth [5][14] - Core revenue declined by 2% year-over-year, slightly below expectations, with total revenue down 3% due to foreign exchange headwinds [13][14] - Adjusted operating profit was $373 million, with adjusted operating margin expansion of 20 basis points [14] - Adjusted free cash flow was better than expected at $222 million, with a 7% increase in six-month growth [14][27] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment grew core revenues by 2%, while Advanced Healthcare Solutions (AHS) grew by 2.5% [16][18] - Precision Technologies (PT) segment experienced an 8.4% core revenue decline, driven by lower orders in Test and Measurement and shipment delays in Sensors and Safety Systems [13][20] - IOS segment adjusted operating margins expanded by 150 basis points, while AHS saw a 70 basis point contraction in adjusted operating margins [17][19] Market Data and Key Metrics Changes - North America showed stable industrial demand, while Europe and China faced a more challenging macro environment [16] - The company expects China to be down high single digits for the year, reflecting increased challenges [126] - Overall, North America is anticipated to remain the strongest market for Fortive [125] Company Strategy and Development Direction - Fortive is focusing on enhancing supply chain resilience, having reduced exposure to imports from China by 70% since 2018 [7][23] - The company is targeting the completion of its separation by the end of the second quarter, which is expected to unlock shareholder value [30][32] - Fortive aims to increase its recurring revenue mix from approximately 40% to roughly 50% post-separation [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a more dynamic macro environment and moderating demand in PT, with expectations for a modest improvement in the segment [7][28] - The company is implementing countermeasures to mitigate tariff impacts, estimating a gross tariff impact of $190 million to $220 million [24][27] - Management remains confident in the ability to navigate current challenges and deliver best-in-class net working capital performance [27][30] Other Important Information - The company announced the appointment of a new CFO, Mark Okerstrom, who is expected to drive additional shareholder value [8][10] - Fortive's strategic approach includes pricing adjustments and optimizing sourcing and logistics to mitigate tariff impacts [25][26] Q&A Session Summary Question: Clarification on localizing production - Management indicated that localizing production involves accelerating existing plans rather than building new capacity in the U.S. [41][42] Question: Insights on Test and Measurement decline - The decline was attributed to customers delaying orders due to increased policy and macro uncertainty, with expectations for recovery pushed to 2026 [44][46] Question: Volatility in Test and Measurement industry - The volatility is linked to the sector's exposure to R&D investments, which customers can delay amid economic uncertainty [53][55] Question: Clarification on tariff impacts - Management clarified that the estimated tariff impact for 2025 is around $200 million, with plans to offset about 80% of it [82][90] Question: Expectations for North America and Western Europe - North America is expected to perform well, while China is anticipated to face challenges, with a projected decline in revenue [125][126]

Financial Data and Key Metrics Changes - Fortive reported adjusted earnings per share (EPS) of $0.85, which is in line with expectations, reflecting a 2% year-over-year growth [7][17] - Core revenue declined by 2% year-over-year, slightly below expectations, with total revenue down 3% due to foreign exchange headwinds [16][30] - Adjusted operating profit was $373 million, with adjusted operating margin expansion of 20 basis points [17] - Adjusted free cash flow was better than expected at $222 million, with a 7% increase in six-month growth [17] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment grew core revenues by 2%, while Advanced Healthcare Solutions (AHS) grew by 2.5% [18][20] - Precision Technologies (PT) segment saw a core revenue decline of 8.4%, driven by lower orders in Test and Measurement and shipment delays in Sensors and Safety Systems [16][22] - IOS adjusted operating margins expanded by 150 basis points, while AHS margins contracted by 70 basis points due to growth investments and unfavorable FX [21][22] Market Data and Key Metrics Changes - Stable industrial demand was noted in North America, but a more challenging macro environment was observed in Europe and China [19] - Continued strong demand in communications for high-performance computers and AI data centers was reported, partially offsetting declines in other areas [23] - The company expects accelerated growth in the PT segment as the year progresses, despite current challenges [22] Company Strategy and Development Direction - Fortive is targeting a separation by the end of the second quarter, which is expected to enhance focus on core businesses [10][34] - The company is implementing countermeasures to mitigate tariff impacts, including localizing production and optimizing sourcing [26][28] - Fortive aims to increase its recurring revenue mix from approximately 40% to 50% post-separation, benefiting from software growth [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a more dynamic macro environment and moderating demand in PT, with expectations for gradual recovery [9][30] - The company is confident in its ability to navigate current challenges, leveraging its business system and operational discipline [9][26] - Future guidance for adjusted EPS is set between $3.80 and $4.00, accounting for tariff impacts and underlying demand moderation [30] Other Important Information - The company has reduced its exposure to imports from China by 70% since 2018, enhancing supply chain resilience [10][26] - Management emphasized the importance of innovation and maintaining a strong product pipeline to drive growth [34] Q&A Session Summary Question: Clarification on tariff localization strategy - Management explained that localization involves accelerating existing plans rather than building new capacity, focusing on contract manufacturing and current facilities [44] Question: Insights on Test and Measurement segment performance - Management noted that the decline was due to customers delaying orders amid economic uncertainty, particularly in semiconductor and electronics sectors [46][48] Question: Expectations for Precision Technologies segment - Management indicated that while orders were positive in Q1, they expect a slower recovery, potentially pushing improvements into 2026 [49][118] Question: Clarification on healthcare margins - Management stated that healthcare margins typically ramp up throughout the year, with Q4 expected to be the strongest margin quarter [70][72] Question: Impact of tariffs on overall business - Management confirmed that the estimated tariff impact for 2025 is around $200 million, with plans to offset approximately 80% of it [88][90]

Core Insights - Fortive reported revenue of $1.47 billion for the quarter ended March 2025, a decrease of 3.3% year-over-year, and EPS of $0.85, slightly up from $0.83 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $1.49 billion, resulting in a surprise of -1.22%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Sales in Intelligent Operating Solutions reached $671.40 million, exceeding the estimated $669.35 million, reflecting a year-over-year increase of 0.9% [4] - Sales in Advanced Healthcare Solutions were $302.20 million, slightly below the estimated $303.14 million, with a year-over-year increase of 0.8% [4] - Sales in Precision Technologies were reported at $500.60 million, significantly lower than the estimated $524.46 million, marking a year-over-year decline of 10.5% [4] - Operating profit for Precision Technologies was $87.30 million, below the average estimate of $98.49 million [4] - Operating profit for Intelligent Operating Solutions was $173.70 million, surpassing the estimated $158.96 million [4] - Operating profit for Advanced Healthcare Solutions was $26.30 million, exceeding the average estimate of $24.60 million [4] - Adjusted operating profit (Non-GAAP) for Advanced Healthcare Solutions was $70.90 million, below the estimate of $74.55 million [4] - Adjusted operating profit (Non-GAAP) for Intelligent Operating Solutions was $223.70 million, above the estimate of $211.49 million [4] - Adjusted operating profit (Non-GAAP) for Precision Technologies was $109.10 million, below the average estimate of $122.67 million [4] - Operating profit for Other segments was reported at -$53.70 million, worse than the estimated -$36.23 million [4] Stock Performance - Fortive's shares have returned -6.2% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Fortive reported quarterly earnings of $0.85 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.83 per share a year ago [1] - The company posted revenues of $1.47 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.22% and down from $1.52 billion year-over-year [2] - Fortive shares have declined approximately 7.1% since the beginning of the year, compared to a decline of 5.3% for the S&P 500 [3] 分组2 - The earnings outlook for Fortive is uncertain, with current consensus EPS estimates at $0.99 for the coming quarter and $4 for the current fiscal year, with revenues expected to be $1.55 billion and $6.24 billion respectively [7] - The Electronics - Testing Equipment industry, to which Fortive belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The estimate revisions trend for Fortive is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Q1 2025 Performance - Revenue reached $1.47 billion, reflecting a (3)% total growth and a (2)% core growth[7] - Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS) experienced a combined growth of +2%[7] - Precision Technologies (PT) faced a decline of (8)%[7] - Adjusted operating profit was $373 million, with an adjusted operating margin expansion of +20 bps[7] - Adjusted EPS stood at $0.85, representing a +2% growth[7] - Adjusted Free Cash Flow was $222 million, a decrease of (4)%[7] Outlook and Strategy - The company expects Q2 2025 Adjusted EPS to be between $0.85 and $0.90, and FY 2025 Adjusted EPS to be between $3.80 and $4.00[25] - Estimated gross incremental tariff impacts for 2025 range from $190 million to $220 million[20] - Mitigation strategies include pricing actions, supply chain optimization, and cost productivity measures, aiming for full offset by Q4 2025 and complete mitigation in 2026[24] Separation Update - The separation into two independent companies, Fortive and Ralliant, is on track for completion by the end of Q2 2025[6,33] - Investor days are scheduled for June 10th[6,33]

Analysts on Wall Street project that Fortive (FTV) will announce quarterly earnings of $0.85 per share in its forthcoming report, representing an increase of 2.4% year over year. Revenues are projected to reach $1.49 billion, declining 2.1% from the same quarter last year.The consensus EPS estimate for the quarter has undergone a downward revision of 1.6% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates duri ...

Fortive (FTV) shares soared 8.3% in the last trading session to close at $67.76. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 15.7% loss over the past four weeks.The increase in share price can be linked to President Trump’s announcement of a 90-day suspension on reciprocal tariffs, excluding China. This news caused stock market indices to surge, which in turn boosted the value of many stocks, including Fortive.In addition to ...