A month has gone by since the last earnings report for Pentair plc (PNR) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Pentair due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns out, fr ...

Financial Data and Key Metrics Changes - The company reported sales of $1 billion, down 1% year-over-year, with adjusted operating income increasing 12% to $243 million and adjusted EPS rising 18% to $1.11 [22][11][12] - Return on sales (ROS) expanded by 260 basis points to 24% [11][22] - The company maintained its full-year 2025 sales and adjusted EPS guidance of $4.65 to $4.80, representing a year-over-year increase of approximately 9% at the midpoint [11][33] Business Line Data and Key Metrics Changes - Pool sales increased by 7% to $384 million, driven by price, volume, and a recent acquisition, with segment income up 14% [28][22] - Flow sales declined by 4%, with residential sales down 6% and commercial sales up 3%, marking the 11th consecutive quarter of year-over-year growth [24][22] - Water solutions sales decreased by 5% to $258 million, with segment income growing 9% to $61 million [26][22] Market Data and Key Metrics Changes - The company noted challenges in the residential and irrigation markets, impacting overall sales performance [10] - The commercial water segment faced difficult comparisons, contributing to the decline in sales [10] Company Strategy and Development Direction - The company is focused on transformation initiatives to drive margin expansion, with $174 million saved in 2023 and 2024 combined, and an expectation of an additional $80 million in savings for 2025 [15][19] - The implementation of the 80-20 strategy aims to optimize operations and enhance profitability by focusing on high-value core customers [17][20] - The company is adapting its supply chain to mitigate tariff impacts and reduce reliance on China, with a strong emphasis on maintaining a balanced capital allocation strategy [14][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining guidance despite a dynamic operating environment, citing agility in responding to tariff impacts and inflationary pressures [12][19] - The company anticipates potential volume declines due to rising prices but remains optimistic about long-term growth opportunities in the water solutions market [10][20] Other Important Information - The company repurchased $50 million in shares and increased its dividend for the 49th consecutive year, reinforcing its status as a dividend aristocrat [11][22] - The estimated tariff impact for 2025 is approximately $140 million, primarily from China, with mitigation strategies already in place [36][39] Q&A Session Summary Question: Can you provide insights on organic sales assumptions for the year? - Management indicated that higher prices are expected to offset lower volumes, particularly in the North American residential housing market [46][48] Question: What is the estimated tariff impact for 2025? - The estimated tariff impact of $140 million is an in-year figure, with expectations that it will primarily affect the second half of the year [49][50] Question: How is the channel reacting to pricing strategies? - Management noted that the channel is currently adapting to price increases, which are being paced to allow for adjustments based on market conditions [76][90] Question: What are the expectations regarding demand destruction from tariffs? - Management has not yet observed significant demand destruction but is monitoring the situation closely [71][72] Question: How is the company managing inventory in light of tariffs? - The company is pre-positioning inventory and capping orders to avoid disruptions in the supply chain, learning from past experiences [68][70] Question: What is the long-term strategy for sourcing and manufacturing? - The company is actively working to diversify its supply chain and reduce dependence on China, with plans to reposition factories for greater efficiency [96][104]

Financial Performance - For the first three months of 2025, consolidated net sales decreased by 0.7% to $1,010.4 million compared to $1,017.2 million in the same period of 2024[69]. - Gross profit as a percentage of net sales decreased by 1.5 percentage points to 38.4% in Q1 2025, down from 39.9% in Q1 2024[69]. - The Flow segment reported net sales of $367.9 million, a decrease of 4.3% from $384.3 million in the prior year, with a segment income increase of 8.2% to $83.6 million[77]. - Net sales for Water Solutions decreased by 5.5% to $258.2 million in Q1 2025 compared to $273.1 million in Q1 2024, primarily due to decreased sales volume and a business exit in the residential segment[81]. - Pool segment net sales increased by 6.8% to $383.9 million, driven by a 2.7% increase in selling prices and a 1.5% increase in sales volume[88][89]. - Segment income for Pool increased by 13.7% to $126.0 million, with a 2.0 percentage point increase in segment income as a percentage of net sales[88][91]. - Segment income for Water Solutions increased by 9.2% to $60.7 million, with a 3.1 percentage point increase in segment income as a percentage of net sales[81][86]. Acquisitions and Investments - The company completed the acquisition of G & F Manufacturing for $116.0 million in cash, enhancing its Pool segment offerings[67]. - The company anticipates continued investment in research and development to pursue attractive product and geographic market opportunities[68]. Cost and Expenses - Inflationary cost increases for raw materials and logistics were noted, with ongoing pressures expected to continue throughout 2025[68]. - The company implemented a Transformation Program aimed at driving operational excellence and margin expansion, with ongoing transformation costs expected throughout 2025[68]. - The net interest expense decreased by 27.8% to $27.3 million in Q1 2025, attributed to lower debt levels compared to the prior year[74]. Cash Flow and Liquidity - Cash used for operating activities of continuing operations was $38.9 million in Q1 2025, an improvement from $107.4 million in Q1 2024[98]. - The company experienced seasonal cash usage in Q1 2025, drawing on its revolving credit facility, with expectations of significant cash generation in Q2 2025[93][95]. - The company reported a free cash flow of $(55.7) million for Q1 2025, an improvement from $(126.9) million in Q1 2024[104]. - The company anticipates sufficient liquidity to meet cash needs for the next twelve months, supported by existing cash flows and borrowing capacity[95]. Debt and Credit Facilities - Total availability under the Senior Credit Facility was $694.3 million as of March 31, 2025, with an option to increase the facility by up to $300.0 million[106]. - The company has a $900.0 million senior unsecured revolving credit facility maturing on December 16, 2026, and a $1.0 billion term loan facility maturing on July 28, 2027[105][107]. Shareholder Returns - The Board of Directors authorized a share repurchase program with a maximum limit of $750 million, expiring on December 31, 2025, with $400 million available as of March 31, 2025[111]. - A quarterly cash dividend of $0.25 per share was declared on February 24, 2025, with a total dividend payment of $41.2 million in the first three months of 2025, compared to $38.0 million in the prior year period[112][113]. - The distributable reserve balance was $6.8 billion as of December 31, 2024, which is necessary for future cash dividends and share repurchases under Irish law[114]. - The company repurchased 0.6 million ordinary shares for $50 million during the three months ended March 31, 2025[111]. - The balance of dividends payable was $41.2 million at both March 31, 2025, and December 31, 2024[112]. Assets and Liabilities - Current assets as of March 31, 2025, were $2.2 million, while noncurrent assets were $2,537.3 million, and current liabilities were $1,812.3 million[118]. - Noncurrent liabilities increased to $2,022.9 million as of March 31, 2025, compared to $1,828.6 million as of December 31, 2024[118]. Risk and Accounting Policies - There were no material changes in market risk during the quarter ended March 31, 2025[120]. - The company has not made any material changes to its critical accounting policies and estimates since the last annual report[119]. - The Parent Company Guarantor's principal source of cash flow is dividends from its subsidiaries, with no direct obligation from subsidiaries to pay amounts due on senior notes[116].

Q1 2025 Performance Highlights - Sales decreased by 1% year-over-year, from $1,017 million in Q1 2024 to $1,010 million in Q1 2025[16] - Adjusted Operating Income increased by 12% year-over-year, from $217 million in Q1 2024 to $243 million in Q1 2025[16] - Return on Sales (ROS) expanded by 260 basis points year-over-year, from 214% in Q1 2024 to 240% in Q1 2025[16] - Adjusted Earnings Per Share (EPS) increased by 18% year-over-year, from $094 in Q1 2024 to $111 in Q1 2025[16] Segment Performance - Flow segment sales decreased by 4% year-over-year, from $384 million in Q1 2024 to $368 million in Q1 2025[31], with segment income up 8%[35] and ROS at 227%[34] - Water Solutions segment sales decreased by 5% year-over-year, from $273 million in Q1 2024 to $258 million in Q1 2025[39], but segment income increased by 9%[44] and ROS at 235%[43] - Pool segment sales increased by 7% year-over-year, from $359 million in Q1 2024 to $384 million in Q1 2025[47], with segment income up 14%[51] and ROS at 328%[50] Financial Position and Outlook - The company maintained its full-year 2025 sales guidance of $4085 million to $4165 million and Adjusted EPS guidance of $465 to $480, up approximately 9% at the midpoint versus 2024[17, 62] - The company estimates a total tariff impact of approximately $140 million[64] - The company expects to deliver approximately $80 million in Transformation and 80/20 savings in 2025, net of investments[21]

Pentair plc (PNR) posted adjusted earnings per share (EPS) of $1.11 for the first quarter of 2025, which beat the Zacks Consensus Estimate of $1.01 by a margin of 10%. The bottom line also topped its guidance of $1.00-$1.02 and marked an 18% improvement from the prior-year quarter.Including one-time items, the EPS was 93 cents compared with the prior-year quarter’s 80 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Pentair Delivers Margin Expansion Despite Lower SalesNet sale ...

Shares in water technology and pool products company Pentair (PNR 8.81%) surged by 10.7% in early morning trading on Tuesday. This kind of performance might be expected in the current environment, whereby merely maintaining full-year guidance is a major positive.In addition, management served notice that its transformational initiatives are working and continuing to expand profit margins even as sales declined.Pentair's transformation continuesGoing into 2025, the investment thesis around the stock this yea ...

Core Viewpoint - Pentair plc reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $1.01 per share, and showing an increase from $0.94 per share a year ago, representing an earnings surprise of 9.90% [1][2] Financial Performance - The company achieved revenues of $1.01 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.68%, although this is a slight decrease from year-ago revenues of $1.02 billion [2] - Over the last four quarters, Pentair has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - Pentair shares have declined approximately 21.5% since the beginning of the year, compared to a decline of 12.3% for the S&P 500 [3] - The current Zacks Rank for Pentair is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $1.11 billion, and for the current fiscal year, it is $4.73 on revenues of $4.12 billion [7] - The trend of estimate revisions for Pentair is currently mixed, which may change following the recent earnings report [6] Industry Context - The Waste Removal Services industry, to which Pentair belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - The company reported sales of $1 billion, down 1% year-over-year, with adjusted operating income increasing 12% to $243 million and adjusted EPS rising 18% to $1.11 [22][11][12] - Return on sales (ROS) expanded by 260 basis points to 24% [11][22] - The company maintained its full-year 2025 sales and adjusted EPS guidance of $4.65 to $4.80, representing a year-over-year increase of approximately 9% at the midpoint [11][33] Business Line Data and Key Metrics Changes - Core sales were down 1% year-over-year, with pool sales growing 7%, while flow and water solutions declined by 4% and 5%, respectively [22][23][26] - Pool segment income increased 14% to $126 million, with a return on sales of 32.8% [28] - Water solutions segment income grew 9% to $61 million, with a return on sales of 23.5% [27] Market Data and Key Metrics Changes - Flow sales declined 4% year-over-year, with residential sales down 6% due to higher interest rates, while commercial sales rose 3% [24] - The company noted that the ice business faced difficult year-over-year comparisons but is expected to return to normalized growth rates [27] Company Strategy and Development Direction - The company is focused on transformation initiatives to drive margin expansion, having saved $174 million in 2023 and 2024 combined, with an expectation of an additional $80 million in 2025 [15][29] - The implementation of the 80-20 strategy aims to optimize operations and focus on high-value core sales growth [17][20] - The company is maintaining a balanced capital deployment strategy, including debt repayment, dividends, share repurchases, and M&A [14][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining guidance despite dynamic market conditions, including tariff impacts and inflation [11][33] - The company is monitoring the operating environment closely, particularly regarding potential demand destruction due to tariffs [72][73] - Management highlighted the importance of agility in responding to changing market conditions and maintaining operational efficiency [12][14] Other Important Information - The company repurchased $50 million of shares and increased its dividend for the 49th consecutive year [11][32] - The estimated tariff impact for 2025 is approximately $140 million, primarily from China, with mitigation strategies in place [36][39] Q&A Session Summary Question: Organic sales assumptions for the year - Management indicated that higher prices are expected to offset lower volumes, particularly in the North American residential housing market [47][48] Question: Clarification on tariff impact - The $140 million tariff impact is an in-year estimate for 2025, with expectations that it will primarily affect the second half of the year [49][50] Question: Absorbing tariff impacts in margin guidance - Management confirmed that pricing strategies are designed to exceed tariff impacts, with slight benefits from mix and currency [55][56] Question: Pool forecast growth and selling season - Management noted that while the pool market remains strong, there may be softening in remodeling and discretionary spending later in the year [60][61] Question: Inventory pre-positioning and order capping strategy - The company is capping orders to prevent shadow inventory and ensure supply chain stability, learning from past supply chain issues [69][70] Question: Competitive supply chain positioning - Management acknowledged that while some businesses may face margin challenges, others are positioned to exceed tariff impacts [103][104] Question: Transformation initiatives and future projects - The company is continuously evaluating transformation projects to enhance supply chain effectiveness, with benefits expected in 2026 and beyond [99][100]

Financial Performance - First quarter 2025 sales were $1.0 billion, down 1% year-over-year; core sales also declined 1% excluding currency translation, acquisitions, and divestitures[3] - First quarter 2025 diluted EPS increased 16% to $0.93 compared to $0.80 in the first quarter of 2024; adjusted EPS rose 18% to $1.11[3][7] - Operating income for the first quarter 2025 was $203 million, a 12% increase from the prior year, with a return on sales (ROS) of 20.1%, up 230 basis points[4][7] - Net income for Q1 2025 was $154.9 million, an increase of 16.3% compared to $133.3 million in Q1 2024[24] - Total net sales for Q1 2025 were $1,010.4 million, a slight decrease of 0.8% from $1,017.2 million in Q1 2024[28] - The adjusted operating income for Q1 2025 was $242.5 million, up 11.6% from $217.3 million in Q1 2024[28] - The diluted earnings per share as reported for Q1 2025 was $0.93, with an adjusted diluted earnings per share of $1.11[30] Guidance and Expectations - Full year 2025 GAAP EPS guidance was updated to approximately $4.27 to $4.42, reflecting a 14% to 18% increase compared to 2024[11] - Second quarter 2025 GAAP EPS guidance is approximately $1.24 to $1.28, up 12% to 15% year-over-year[12] - The company maintained its estimated full year 2025 sales growth of flat to up approximately 2% on a reported basis[11] - The company expects full-year net sales to be flat to up 2% compared to 2024[30] Cash Flow and Capital Management - Free cash flow used for continuing operations was $56 million in the first quarter, down from $127 million in the same period last year[8] - Free cash flow from continuing operations for Q1 2025 was $(55.7) million, an improvement from $(126.7) million in Q1 2024[26] - The company experienced a net cash inflow from financing activities of $87.1 million in Q1 2025, compared to $63.2 million in Q1 2024[24] - Capital expenditures for Q1 2025 were $16.8 million, down from $19.3 million in Q1 2024[24] Segment Performance - Water Solutions sales decreased by 5% year-over-year, while Pool sales increased by 7%[6][7] - The Pool segment reported a net sales increase of 6.8% in Q1 2025, reaching $383.9 million compared to $359.5 million in Q1 2024[32] - The return on sales for the Flow segment increased to 22.7% in Q1 2025 from 20.1% in Q1 2024[28] Shareholder Returns - The company repurchased $50 million of ordinary shares and increased its dividend for the 49th consecutive year, paying $0.25 per share[7][9] Asset Management - Current assets increased to $1,727.1 million as of March 31, 2025, compared to $1,436.1 million at the end of 2024[22]

Core Insights - Pentair plc (PNR) has consistently beaten earnings estimates, particularly in the last two quarters, with an average surprise of 3.88% [1][2] - The most recent earnings report showed earnings of $1.08 per share against an expectation of $1.02, resulting in a surprise of 5.88% [2] - The previous quarter also exceeded expectations, reporting $1.09 per share compared to a consensus estimate of $1.07, yielding a surprise of 1.87% [2] Earnings Estimates and Predictions - Recent estimates for Pentair have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) indicating potential for another earnings beat [4][7] - The current Earnings ESP for Pentair is +0.55%, suggesting analysts are optimistic about the company's near-term earnings potential [7] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5][6] Earnings Release Information - Pentair's next earnings report is anticipated to be released on April 22, 2025 [7] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]