Watts Water (WTS) reported $543.6 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 7.8%. EPS of $2.03 for the same period compares to $2.04 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $538.83 million, representing a surprise of +0.89%. The company delivered an EPS surprise of +2.01%, with the consensus EPS estimate being $1.99. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- ...

Watts Water (WTS) came out with quarterly earnings of $2.03 per share, beating the Zacks Consensus Estimate of $1.99 per share. This compares to earnings of $2.04 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 2.01%. A quarter ago, it was expected that this maker of valves for plumbing, heating and water needs would post earnings of $2.34 per share when it actually produced earnings of $2.46, delivering a surprise of 5.13%. O ...

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Did you analyze how Watts Water (WTS) fared in its international operations for the quarter ending June 2024? Given the widespread global presence of this maker of valves for plumbing, heating and water needs, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities. In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial h ...

Financial Data and Key Metrics Changes - The company reported sales of $597 million, up 12% on a reported basis, while organic sales were flat [22] - Adjusted operating profit increased 8% to $112 million, with adjusted operating margins at 18.8%, down 70 basis points [23] - Adjusted earnings per share rose 5% to $2.46, driven by operational performance and acquisitions [25] - Free cash flow for the first half was $120 million, compared to $89 million in the same period last year [26] - The balance sheet remains robust, with a net debt to capitalization ratio at negative 1% [27] Business Line Data and Key Metrics Changes - Americas organic sales increased 5%, with reported sales up 22% year-over-year, benefiting from project timing and acquisitions [28] - Europe organic sales decreased 15%, with reported sales down 16%, impacted by declines in wholesale plumbing and OEM businesses [30] - APMEA organic sales grew 18%, with reported sales growth of 16%, despite a 2% negative impact from foreign exchange [32] Market Data and Key Metrics Changes - Global GDP remains positive but lower compared to 2023, affecting repair and replacement activities [13] - The Americas region is experiencing softness in single-family and multifamily new construction, with institutional new construction holding steady [14][15] - The Asia Pacific region anticipates growth in China and the Middle East, driven by data centers and strong project activity [16] Company Strategy and Development Direction - The company is maintaining its full-year outlook, expecting solid first-half performance to offset second-half weakness, particularly in Europe [17] - Incremental investments of $2 million are being accelerated into 2024, increasing total investments to $22 million for new product development [18] - The integration of recent acquisitions is progressing well, with synergy realization ahead of schedule [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, particularly in Europe, due to geopolitical uncertainties and economic challenges [17][56] - The company is closely monitoring the impact of destocking activities in the wholesale channel and expects to see continued softness in the second half of 2024 [53][68] - There are indications that the heat pump market in Europe may stabilize by early 2025, but current inventory levels remain high [78] Other Important Information - The company published its 2023 sustainability report, highlighting progress in sustainability initiatives [19][21] - The new SAP ERP system implementation is on schedule and budget, aimed at driving productivity and supporting the company's smart and connected strategy [12] Q&A Session Summary Question: Can you expand on project timing as a driver behind the strength in the quarter? - Management explained that project timing in APMEA, particularly in data centers, and in the Americas for heating and hot water solutions contributed approximately $7 million to $8 million in sales pulled into the second quarter [47] Question: What are the headwinds expected from destocking and non-residential construction? - Management indicated that destocking in the wholesale channel is approximately $7 million to $8 million, with multifamily construction expected to decline due to reduced new starts [53][68] Question: How is the company addressing the challenges in the European market? - Management acknowledged that the European market is softer than anticipated, with ongoing destocking in the heat pump segment expected to last until early 2025 [56][78] Question: What is the outlook for the data center business? - The data center business is currently less than 2% of overall sales but has grown significantly from a small base, with opportunities in liquid cooling presenting additional content opportunities [59][60] Question: How does the company view the M&A pipeline? - Management confirmed that the M&A pipeline remains strong, with ongoing discussions, but emphasized a disciplined approach to acquisitions [71]

Watts Water Technologies, Inc (WTS) reported second-quarter 2024 adjusted earnings per share (EPS) of $2.46, which increased 5% on a year-over-year basis and beat the Zacks Consensus Estimate by 5.1%. The company's quarterly net sales rose 12% year over year to $597.3 million. The top line surpassed the Zacks Consensus Estimate by 1.8%. Organic sales remained flat year over year. The company's performance benefited from higher revenue growth in the Asia-Pacific, the Middle East and Africa (APMEA) and the Am ...

Watts Water (WTS) reported $597.3 million in revenue for the quarter ended June 2024, representing a yearover-year increase of 12.1%. EPS of $2.46 for the same period compares to $2.34 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $586.67 million, representing a surprise of +1.81%. The company delivered an EPS surprise of +5.13%, with the consensus EPS estimate being $2.34. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ...

Sales Performance - Reported sales of $597 million increased by 12% compared to Q2 2023, with organic sales remaining flat[1][4] - Sales in the Americas reached $448 million, a 22% increase on a reported basis and 5% organically, driven by price realization and core product growth[5] - European sales decreased by 16% to $114 million, with a 15% decline in organic sales due to lower volumes and unfavorable foreign exchange impacts[6] - APMEA region sales increased by 16% to $35 million, with an 18% organic growth, benefiting from project timing[7] - Total sales for the second quarter of 2024 reached $597.3 million, a 12.1% increase from $532.8 million in the second quarter of 2023[16] - The Americas segment reported sales of $448.1 million for the second quarter of 2024, up 22.0% from $366.9 million in the same quarter of 2023[16] - The APMEA segment's sales grew to $35.1 million in the second quarter of 2024, up from $30.3 million in the same quarter of 2023, indicating a growth of 15.9%[16] - Reported net sales for the six months ended June 30, 2024, reached $1,168.2 million, a 16.3% increase compared to $1,004.5 million for the same period in 2023[24] Earnings and Margins - Reported EPS of $2.44, an increase of 8%; adjusted EPS of $2.46, up 5%[1][4] - Operating margin reported at 18.7%, down 10 basis points; adjusted operating margin at 18.8%, down 70 basis points[1][4] - Adjusted operating income for Q2 2024 was $112.1 million, compared to $103.9 million in Q2 2023, reflecting an increase of 2.1%[20] - The adjusted operating margin for Q2 2024 was 18.8%, slightly down from 19.5% in Q2 2023[20] - Net income for Q2 2024 was reported at $82.0 million, up from $75.9 million in Q2 2023, marking a 1.6% increase[20] - Net income for the six months ended June 30, 2024, was $154.5 million, up from $140.6 million for the same period in 2023, representing an increase of about 9.0%[15] Cash Flow and Investments - Operating cash flow for the first six months of 2024 was $131 million, up from $101 million in the same period last year, resulting in free cash flow of $120 million[8] - The company reported a net cash provided by operating activities of $130.9 million for the six months ended June 30, 2024, compared to $100.5 million for the same period in 2023, an increase of 30.2%[15] - Free cash flow for the six months ended June 30, 2024, was $119.7 million, up from $88.9 million in the same period last year[25] - The cash conversion rate of free cash flow to net income improved to 77.5% for the six months ended June 30, 2024, compared to 63.2% in the prior year[25] - The company invested $96.3 million in business acquisitions during the first half of 2024, compared to $11.7 million in the same period of 2023[15] Financial Position - Total assets increased to $2,383.3 million as of June 30, 2024, compared to $2,309.4 million at December 31, 2023, reflecting a growth of approximately 3.2%[14] - Total stockholders' equity increased to $1,618.2 million as of June 30, 2024, from $1,513.3 million at December 31, 2023, reflecting a growth of 6.9%[14] - Cash and cash equivalents decreased to $279.4 million at the end of the period from $350.1 million at the beginning of the year, a decline of 20.2%[15] - Net debt as of June 30, 2024, was $(20.7) million, a decrease from $(51.8) million at the end of 2023[26] - The net debt to capitalization ratio improved to (1.3)% as of June 30, 2024, compared to (3.5)% at the end of 2023[26] Future Outlook - Full-year 2024 outlook maintains reported sales growth of 7% to 12% and organic sales range of -4% to 1%[10] - The company forecasts reported net sales growth of 7% to 12% for the full year 2024, with an anticipated impact from acquisitions and foreign exchange of (11)%[27] - Organic sales growth is projected to be between (4)% to 1% for the full year 2024[27] - The operating margin is expected to be in the range of 16.6% to 17.2% for the full year 2024, with an adjusted operating margin forecasted at 17.1% to 17.7%[27] - Future outlook remains positive with continued focus on organic growth and strategic acquisitions to enhance market position[20]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence [1][2] - The Zacks Style Scores offer a unique rating system for stocks based on value, growth, and momentum, aiding investors in selecting securities with high potential for market outperformance [3][4] Zacks Style Scores - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6] - Value Score emphasizes identifying undervalued stocks using financial ratios [4] - Growth Score assesses a company's financial health and future growth potential [5] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [5] - VGM Score combines all three styles to highlight stocks with the best overall potential [6] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - A large pool of stocks is available, with over 800 top-rated options, making the Style Scores essential for narrowing down choices [9] Stock Highlight: Watts Water Technologies, Inc. (WTS) - Watts Water Technologies, Inc. specializes in water safety and flow control products, generating 73.4% of its revenues from the Americas, 21.6% from Europe, and 5% from APMEA [12] - Currently rated 3 (Hold) by Zacks, WTS has a VGM Score of B and a Momentum Style Score of B, with shares increasing by 11.9% in the past four weeks [13] - The Zacks Consensus Estimate for WTS's earnings has risen by $0.06 to $8.70 per share, with an average earnings surprise of 11.7% [13][14]