Fortive(FTV) - 2024 Q4 - Annual Results

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].