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A month has gone by since the last earnings report for Watts Water (WTS) . Shares have lost about 7% in that time frame, outperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Watts Water due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its 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, es ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-11499 WATTS WATER TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Incorporation or Organization) Identification No.) 815 Chestnut Stre ...

Have you assessed how the international operations of Watts Water (WTS) performed in the quarter ended December 2024? For this maker of valves for plumbing, heating and water needs, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and gro ...

Core Insights - Watts Water Technologies, Inc. reported better-than-expected fourth-quarter financial results, with earnings of $2.05 per share, surpassing the analyst consensus estimate of $1.91 per share [1] - The company achieved quarterly sales of $540.400 million, exceeding the analyst consensus estimate of $537.260 million [1] Financial Performance - The CEO highlighted record results for the quarter and full year, including record operating income, adjusted earnings per share, and full year sales [2] - Despite the positive financial results, shares of Watts Water Technologies fell by 1.8% to $220.61 [2] Analyst Reactions - Following the earnings announcement, analysts adjusted their price targets for Watts Water Technologies [3] - Stifel analyst Nathan Jones maintained a Hold rating and raised the price target from $218 to $219 [4] - Goldman Sachs analyst Brian Lee maintained a Neutral rating and increased the price target from $197 to $217 [4]

Financial Data and Key Metrics Changes - The company achieved record full-year sales of $2.25 billion, up 10% on a reported basis but down 1% organically, primarily due to challenges in Europe [29][30] - Adjusted EPS increased by 7% to $8.86, reflecting operational contributions and reduced interest expenses [32] - Free cash flow reached a record $332 million, an 18% increase compared to 2023, with a conversion rate of 114% [9][34] Business Line Data and Key Metrics Changes - Organic sales in the Americas decreased by 3%, while reported sales increased by 3%, aided by earlier shipments of large projects [24][25] - Europe experienced a significant decline, with organic and reported sales down 15%, attributed to fewer shipping days and destocking in the wholesale channel [26] - The Apnea segment showed resilience with 3% organic growth and 4% reported sales growth, benefiting from foreign exchange movements [26] Market Data and Key Metrics Changes - The Americas market is expected to see sales ranging from down 3% to up 3%, while Europe is projected to decline between 8% and 2% [37] - The Asia Pacific region is anticipated to grow modestly, particularly in Australia and New Zealand, while Europe remains weak [22][37] Company Strategy and Development Direction - The company is focused on strategic M&A, high-return investments, competitive dividends, and stable share buybacks as capital allocation priorities [10] - The acquisition of Icon Systems is expected to enhance digital offerings and provide growth opportunities in niche markets [12] - The company is implementing a restructuring program to exit a manufacturing facility in France, aiming to simplify operations and improve productivity [13][39] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding market conditions, noting that while institutional projects remain strong, multifamily construction is expected to decline significantly [90] - The company anticipates continued challenges in Europe due to heat pump destocking and a weak construction market, particularly in the first half of 2025 [102][104] - Management emphasized the importance of controlling costs and driving productivity through the One Watts performance system to navigate current market conditions [46][47] Other Important Information - The company plans to eliminate approximately $10 million to $15 million in sales from low-performing products as part of its 80/20 model [16] - The adjusted effective tax rate for the fourth quarter was 24.6%, up 230 basis points compared to the previous year, primarily due to the recognition of additional R&D credits [28] Q&A Session Summary Question: Can you touch on the margin profile of what you're exiting with the 80/20 action? - Management indicated that the exited products are generally breakeven margin businesses, with some incremental sales expected to carry into next year [54] Question: What is the impact of fewer shipping days on sales? - Management noted that fewer shipping days negatively impacted sales by approximately 5% across all regions, particularly in the Americas [24] Question: How will the company handle the new tariffs on aluminum and steel? - Management plans to raise prices to offset the impact of tariffs and remains cautious about potential slowdowns in the construction industry [60][61] Question: What is the outlook for European margins? - Management aims to restore European margins to pre-decline levels, focusing on restructuring and adjusting the cost structure [93] Question: Can you provide details on the Icon acquisition and its integration? - The acquisition is expected to be EBITDA neutral and offers opportunities for leveraging technology across the company's portfolio [69][116]

WATTS WATER TECHNOLOGIES Q4 2024 EARNINGS CONFERENCE CALL Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective tax rate, capital expenditures, cash flow, water market growth, acquisition strategy and integration, construction outlook, inflation and management goals and objectives. Watts cautions investors tha ...

Watts Water Technologies (WTS 10.37%) stock was up by 10.4% as of 11:45 a.m. ET Tuesday after the company delivered top- and bottom-line beats after the close of trading Monday.Heading into its fourth-quarter report, analysts forecast the water systems equipment supplier would earn $1.91 per share, adjusted for one-time items, on sales of $537.1 million. In fact, it earned $2.05 per share on quarterly sales of $540 million. A complicated Q4 pictureNot all the news was good. Watts' sales slipped by 1% year o ...

Core Insights - Watts Water Technologies, Inc. (WTS) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $2.05, an increase from $1.97 in the prior-year quarter, exceeding the Zacks Consensus Estimate by 7.3% [1] - The company's quarterly net sales decreased by 1.3% year over year to $540.4 million, slightly surpassing the Zacks Consensus Estimate by 0.6% [2] Sales Performance - Acquisitions in the Americas contributed $23 million in sales, accounting for 4% of overall growth, while organic sales fell by 5% year over year [3] - Net sales in the Americas rose 3% year over year to $398 million, but organic sales dipped 3% due to fewer shipping days [4] - Europe experienced a significant decline, with net sales plunging 15% year over year to $109 million, attributed to lower volumes and a decrease in the OEM channel [5] - APMEA saw a 4% increase in net sales to $34 million, with strong demand in China and the Middle East driving growth [6] Financial Metrics - Gross profit decreased by 1.2% year over year to $252.7 million, while selling, general and administrative expenses fell by 5.9% to $162.9 million [7] - Operating income increased by 12.9% year over year to $89 million, with an operating margin expansion of 210 basis points to 16.5% [7] - For the full year 2024, cash from operating activities was $361.1 million, up from $310.8 million in the prior year, and free cash flow increased to $331.7 million from $281.1 million [8] Share Repurchase and Liquidity - In the fourth quarter, the company repurchased approximately 20,000 shares for $4 million, totaling about 85,000 shares for $17 million in the full year 2024 [9] - As of December 31, 2024, the company had $386.9 million in cash and cash equivalents, with long-term debt of $197 million [10] Guidance - For 2025, the company anticipates adjusted operating margins between 17.7% and 18.3%, with reported and organic sales expected to range from a decline of 3% to an increase of 2% [11] - For the first quarter of 2025, projected adjusted operating margins are between 16.9% and 17.5%, with reported and organic sales expected to decline by 7-3% [12] Market Position - Watts Water currently holds a Zacks Rank 3 (Hold), with shares having increased by 17.1% in the past six months, contrasting with no change in the Zacks Instruments - Control industry [13]

Watts Water (WTS) reported $540.4 million in revenue for the quarter ended December 2024, representing a year-over-year decline of 1.3%. EPS of $2.05 for the same period compares to $1.97 a year ago.The reported revenue represents a surprise of +0.58% over the Zacks Consensus Estimate of $537.27 million. With the consensus EPS estimate being $1.91, the EPS surprise was +7.33%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Stre ...