Core Insights - A Fluke survey indicates that 68% of respondents believe the EV industry is lagging in adoption, yet 92% are confident in the long-term success of EV charging infrastructure due to current standards and regulations [1][2]. Industry Challenges - 47% of respondents feel the industry is 25-50% behind the adoption curve, while 17% believe it is over 50% behind [2]. - 40% of U.S. respondents predict that widespread charger availability will not meet demand for up to seven years or longer [2]. - Charger maintenance is a primary concern, with 36% of respondents identifying it as a key challenge [3]. - 44% of respondents cite inoperable chargers as a significant hurdle, and 40% point to software incompatibility as another major obstacle [3][9]. Workforce Development - 88% of respondents highlight a critical skills gap within the EV workforce, indicating an urgent need for training and development [3]. - Key factors for a successful EV charging strategy include predictive maintenance (32%) and artificial intelligence (31%) [4][9]. Infrastructure Reliability - The survey emphasizes the need for resilient infrastructure design, remote monitoring, and standardized best practices to ensure the reliability and efficiency of the EV charging ecosystem [5]. - The EV industry is at a pivotal moment, with a critical need to close maintenance gaps and upskill technicians to ensure optimal performance at every charging point [6].

Group 1 - Fortive Corp's shares rose by 1.85% to $80.55 despite disappointing fourth-quarter revenues [4] - Adjusted cash earnings were reported at $1.17 per share, exceeding RBC's estimates by 6 cents, with core earnings growing by 1.8% year-on-year [1] - Sales for the fourth quarter were $1.62 billion, slightly missing the consensus estimate of $1.629 billion [3] Group 2 - Management guided for first-quarter adjusted earnings of 83 to 86 cents per share, below the consensus of 91 cents [3] - The company expects revenues of $1.48 billion to $1.51 billion, missing the consensus of $1.565 billion [4] - Fiscal year 2025 guidance includes adjusted EPS expected to be between $4.00 and $4.12, with a midpoint of $4.06, below the consensus of $4.13 [4] Group 3 - The spinoff of Precision Technologies is anticipated to be completed early in the third quarter, ahead of the previously planned fourth quarter [2] - Analysts from RBC Capital Markets and Truist Securities have provided differing ratings and price targets, with RBC raising its target from $77 to $80 and Truist maintaining a Buy rating with a target of $90 [5]

Core Insights - Fortive Corporation reported fourth-quarter 2024 adjusted EPS of $1.17, exceeding the Zacks Consensus Estimate by 4.5% and reflecting a year-over-year increase of 19.4% [1] - Revenues for the quarter rose 2.3% year over year to $1.62 billion, although this figure missed the Zacks Consensus Estimate by 0.5% [2] - The company plans to separate its Precision Technologies business into an independent publicly traded company named Ralliant, expected to close in early Q3 2025 [3] Financial Performance - The Intelligent Operating Solutions segment generated revenues of $710.8 million, contributing 43.9% to total revenues, up 4.1% year over year [5] - Precision Technologies segment revenues totaled $567.7 million, down 0.4% year over year [5] - Advanced Healthcare Solutions reported revenues of $341.8 million, up 3.2% year over year [5] - Gross profit increased 3.1% to $977.2 million, with an adjusted operating margin of 28.7%, up 1% year over year [6] Cash Flow and Share Repurchase - Fortive used its second-half free cash flow to repurchase about 10 million shares, representing 80% of its free cash flow [4] - As of December 31, 2024, cash and cash equivalents were $813.3 million, with operating cash flow of $502.2 million for the fourth quarter [7] Future Outlook - For 2025, Fortive anticipates revenues between $6.23 billion and $6.35 billion, with core revenue growth of 1.5% to 3.5% [8] - Adjusted diluted EPS is expected to be between $4 and $4.12, reflecting a year-over-year increase of 3% to 6% [8] - For Q1 2025, core revenues are expected to be flat, with adjusted EPS projected between 83 cents and 86 cents [10]

Core Viewpoint - Fortive Corporation held its Q4 2024 Earnings Conference Call on February 7, 2025, to discuss financial results and future expectations [1][2]. Group 1: Company Overview - The call featured key participants including Elena Rosman (Vice President of Investor Relations), James Lico (President and CEO), and Charles McLaughlin (Senior Vice President and CFO) [1][3]. - The company presented certain non-GAAP financial measures during the call, with additional information available on their website [3]. Group 2: Financial Reporting - The statements made during the call included forward-looking statements regarding anticipated future events or developments [4].

Financial Data and Key Metrics Changes - Fortive reported better-than-expected performance in Q4 2024, with gross margins at 60% and adjusted operating margins nearing 27% [9] - Adjusted earnings per share (EPS) was $1.17, reflecting a 19% year-over-year increase, and record Q4 free cash flow reached $465 million, up 13% year-over-year [22] - For the full year, adjusted EPS was $3.89, up 13%, with record free cash flow of $1.4 billion, representing 23% free cash flow margins [23] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (iOS) and Advanced Healthcare Solutions (AHS) combined revenues grew 4% in Q4, with adjusted operating margins up 140 basis points to over 33% [24] - Precision Technologies (PT) experienced a core revenue decline of 3% in Q4, with adjusted operating margins contracting 200 basis points [28] - AHS grew core revenue by 5% in Q4, with FX headwinds impacting total growth by approximately 150 basis points [26] Market Data and Key Metrics Changes - Core revenue growth in China continued to be muted, impacting overall performance [21] - The company expects stable underlying industrial demand in North America and Western Europe, while anticipating a slowdown in China [35] Company Strategy and Development Direction - Fortive is focused on accelerating its strategy and enhancing value creation, with plans for the separation of Precision Technologies into a new company named Ralliant, expected to close early in Q3 2025 [11][45] - The company aims to prioritize the return of capital to shareholders, utilizing record free cash flow for share repurchases [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving core sales growth and strong operating performance for 2025, despite a mixed demand environment [10] - The company anticipates a gradual recovery in Precision Technologies, driven by investments in power infrastructure and aerospace and defense markets [37] Other Important Information - The company achieved several record financial metrics in 2024, including a five-year average core growth acceleration to mid-single digits and significant margin expansions [13][14] - Fortive's commitment to the Fortive Business System (FBS) has driven innovation and sustained performance [15] Q&A Session Summary Question: Can you provide insights on the product side of the business, particularly iOS and AHS? - Management noted strong performance in software and healthcare, with resilient product innovation at Fluke, despite some headwinds in consumables and service parts [56][57] Question: What factors are influencing the Precision Technologies organic sales guidance? - Management indicated that the first quarter would see mid-single-digit declines, with expectations for improvement in the second half of the year due to easier comps and market recovery [68][70] Question: How are tariffs impacting the business? - Management stated that they have enacted measures to counteract the impact of tariffs, particularly in China, and do not expect significant disruptions [78][79] Question: What is the outlook for the semiconductor market? - Management highlighted strong order growth in high-speed computing and defense sectors, while noting challenges in the consumer electronics segment [107][212] Question: Can you elaborate on the growth expectations for the software assets? - Management reported high single-digit growth for software assets, with strong performance from Gordian and Accruent, and improvements in profitability [155][157] Question: What are the expectations for growth in the utilities and power vertical? - Management expects continued strong demand in the utilities sector, particularly from Qualitrol, with double-digit growth anticipated [163][165] Question: How is the company addressing capacity constraints in Qualitrol? - Management indicated that they are ramping up production capacity to meet strong demand, expecting continued double-digit growth [266] Question: What is the expected impact of the spin-off on the company's financials? - Management expects the spin-off to enhance focus and operational efficiency, with both companies positioned for strong free cash flow generation [232][233]

Fourth Quarter 2024 Earnings Release February 7, 2025 Forward Looking Statements & Non-GAAP Financial Measures Statements in this presentation that are not strictly historical, including statements regarding anticipated financial results, global and regional economic conditions, industry trends, geopolitical events, our plans to separate into two independent, publicly-traded companies, including the timing and cost related to the planned separation, interest rate and current exchange rate impact, future pro ...

Core Insights - Fortive (FTV) reported revenue of $1.62 billion for Q4 2024, a year-over-year increase of 2.3%, with an EPS of $1.17 compared to $0.98 a year ago [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $1.63 billion, resulting in a revenue surprise of -0.49%, while the EPS exceeded expectations by +4.46% [1] Financial Performance Metrics - Sales in Intelligent Operating Solutions reached $710.80 million, exceeding the estimated $697.56 million, reflecting a year-over-year increase of +4.1% [4] - Sales in Advanced Healthcare Solutions were $341.80 million, below the estimated $352.61 million, showing a year-over-year decline of -2.8% [4] - Sales in Precision Technologies amounted to $567.70 million, slightly below the estimated $578.15 million, with a year-over-year increase of +3.4% [4] Operating Profit Analysis - Operating profit for Precision Technologies was reported at $113.60 million, below the average estimate of $142.50 million [4] - Operating profit for Intelligent Operating Solutions was $199.60 million, exceeding the average estimate of $184.54 million [4] - Operating profit for Advanced Healthcare Solutions was $46.90 million, slightly below the average estimate of $47.69 million [4] Adjusted Operating Profit - Adjusted operating profit (Non-GAAP) for Advanced Healthcare Solutions was $93.10 million, below the average estimate of $97.89 million [4] - Adjusted operating profit (Non-GAAP) for Intelligent Operating Solutions was $256.40 million, exceeding the average estimate of $244.04 million [4] - Adjusted operating profit (Non-GAAP) for Precision Technologies was $147.40 million, below the average estimate of $157.25 million [4] Stock Performance - Fortive's shares have returned +4% over the past month, outperforming the Zacks S&P 500 composite's +1.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Earnings Performance - Fortive reported quarterly earnings of $1.17 per share, exceeding the Zacks Consensus Estimate of $1.12 per share, and up from $0.98 per share a year ago, representing an earnings surprise of 4.46% [1] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates [2] Revenue Analysis - The company posted revenues of $1.62 billion for the quarter ended December 2024, which was 0.49% below the Zacks Consensus Estimate, but an increase from $1.58 billion year-over-year [2] - Fortive has not been able to beat consensus revenue estimates over the last four quarters [2] Stock Performance and Outlook - Fortive shares have increased approximately 6.5% since the beginning of the year, outperforming the S&P 500's gain of 3.4% [3] - The company's earnings outlook will be crucial for future stock movements, with current consensus EPS estimates at $0.91 for the coming quarter and $4.10 for the current fiscal year [4][7] Industry Context - The Electronics - Testing Equipment industry, to which Fortive belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Fortive's stock may be influenced by the overall industry outlook, as top-ranked industries tend to outperform lower-ranked ones significantly [8]

Financial Performance - Fourth quarter net earnings were $209 million, with adjusted net earnings of $406 million, and diluted net earnings per share of $0.60, up 19% year-over-year[2][4]. - Revenues for the fourth quarter increased 2% year-over-year to $1.62 billion, with 2% core revenue growth; full year revenues increased 3% to $6.23 billion, including 1% core revenue growth[3][4]. - Operating profit for the total company was $307.1 million, slightly down from $310.9 million year-over-year, resulting in an operating margin of 19.0% compared to 19.6%[18]. - Core revenue growth for the year ended December 31, 2024, was 1.3%, with total revenue growth (GAAP) at 2.7%[50]. - Net earnings for the year ended December 31, 2024, were $832.9 million, with diluted net earnings per share of $2.36[48]. Cash Flow and Assets - The company reported operating cash flow of $502 million and free cash flow of $465 million for Q4 2024, representing a 13% year-over-year increase[4]. - Net cash provided by operating activities for the year ended December 31, 2024, was $1,526.8 million, compared to $1,353.6 million in 2023[24]. - Free cash flow for the year ended December 31, 2024, was $1,406.4 million, reflecting a 12.9% increase from the previous year[51]. - Cash and equivalents decreased to $813.3 million as of December 31, 2024, down from $1,888.8 million in 2023[22]. - Total assets increased to $17,016.1 million in 2024 from $16,911.8 million in 2023, driven by an increase in goodwill to $10,156.0 million[22]. Future Projections - For the first quarter of 2025, Fortive anticipates revenue of $1.48 billion to $1.51 billion, with diluted net earnings per share of $0.39 to $0.42 and adjusted diluted net earnings per share of $0.83 to $0.86[4][5]. - Fortive expects GAAP diluted EPS for 2025 to be between $2.38 and $2.50, reflecting a year-over-year increase of 1% to 6%; adjusted diluted EPS is expected to be between $4.00 and $4.12, a year-over-year increase of 3% to 6%[4][5]. - Forecasted Adjusted Diluted Net Earnings Per Share (Non-GAAP) for the three months ending March 28, 2025, is projected to be between $0.83 and $0.86[52]. - Forecasted Adjusted Diluted Net Earnings Per Share (Non-GAAP) for the twelve months ending December 31, 2025, is projected to be between $4.00 and $4.12[52]. Strategic Initiatives - The separation of the Precision Technologies segment is progressing well, with an expected completion in early Q3 2025[4][7]. - The planned separation is intended to qualify as a tax-free spin-off for Fortive shareholders for U.S. federal income tax purposes[7]. - The company initiated a discrete restructuring plan expected to be completed by December 31, 2025, with related charges adjusted in the fourth quarter of 2024[37]. Operational Highlights - Strong order growth was observed across all segments, with double-digit orders growth for the Precision Technologies segment for the second consecutive quarter[4]. - The company highlighted robust margin expansion and record cash flow in 2024, driven by strong execution and FBS-driven innovation[4]. - Intelligent Operating Solutions segment reported sales of $710.8 million, up 4.9% from $682.7 million in the prior year, with an operating margin increase to 28.1% from 25.9%[18]. - Advanced Healthcare Solutions segment achieved sales of $341.8 million, a 3.9% increase from $331.2 million, with operating margins improving to 13.7% from 10.8%[18]. Shareholder Returns - The company repurchased common shares totaling $889.6 million during the year, reflecting a strategic focus on returning value to shareholders[24]. - A charitable donation of $20 million was pledged to the Fortive Foundation, with a corresponding expense recorded in the Consolidated Statements of Earnings[35]. Tax and Expenses - The company recorded a net loss from divestiture of $25.6 million during the year, impacting overall profitability[24]. - Discrete tax expenses resulting from the Separation of NewCo amounted to $65.6 million for the year ended December 31, 2024[38]. - The company recorded a non-cash tax benefit due to revaluation of deferred tax assets in Switzerland, impacting tax expenses[39]. - Anticipated pretax acquisition, divestiture, and separation-related items are estimated at $0.11 for the three months and $0.40 for the twelve months[52].

Financial Results - Fortive Corporation is set to release its fourth-quarter financial results on February 7, 2025, before the market opens [1] - Analysts anticipate quarterly earnings of $1.12 per share, an increase from $0.98 per share in the same period last year [1] - The company projects quarterly revenue of $1.63 billion, compared to $1.58 billion a year earlier [1] Leadership Changes - On January 29, 2025, Fortive announced the appointment of Sharmistha "Shar" Dubey as the Chair of the Board [2] Stock Performance and Analyst Ratings - Fortive shares closed at $79.84, reflecting a gain of 0.4% [3] - JP Morgan analyst Stephen Tusa maintained an Overweight rating but reduced the price target from $92 to $90 [4] - Barclays analyst Julian Mitchell also maintained an Overweight rating, lowering the price target from $95 to $90 [4] - Wells Fargo analyst Joseph O'Dea maintained an Equal-Weight rating and raised the price target from $77 to $80 [4] - Truist Securities analyst Jamie Cook maintained a Buy rating and increased the price target from $89 to $90 [4] - Citigroup analyst Andrew Kaplowitz downgraded the stock from Buy to Neutral, cutting the price target from $92 to $86 [4]