Fortive Gears Up to Report Q3 Earnings: What's in the Offing?

Core Viewpoint - Fortive Corporation is set to release its third-quarter 2024 earnings on October 30, with expectations of revenue growth and earnings per share increase compared to the previous year [1][2]. Financial Expectations - Total revenues are projected to be between $1.535 billion and $1.560 billion, with a Zacks Consensus Estimate of $1.55 billion, indicating a 3.5% increase from the prior-year quarter [2]. - Non-GAAP earnings per share (EPS) are estimated to range from 92 to 95 cents, with the Zacks Consensus Estimate at 93 cents, reflecting a 9.4% increase [2]. Recent Performance - Fortive has exceeded the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 2.6% [3]. - The company's shares have increased by 15.3% over the past year, while the sub-industry has grown by 23.9% [3]. Growth Drivers - Revenue growth is expected to be between 3% and 4.5%, driven by strong demand in the Intelligent Operating Solutions and Healthcare segments, despite flat core growth in the Precision Technologies segment [3]. - Core revenue growth is anticipated to be between 2% and 3.5% [3]. - Strategic acquisitions are expected to contribute to top-line expansion [4]. - The Intelligent Operating Solutions and Advanced Healthcare Solutions segments are experiencing momentum due to resilient revenue streams and new product launches [5]. Challenges - Delays in military and government R&D spending, slower recovery in China affecting Tektronix sales, and softness in Sensing Technologies may hinder the Precision Technologies segment's performance [6]. - Additional challenges include foreign exchange fluctuations, global macroeconomic weakness, and a high debt burden [6]. Strategic Developments - Fortive plans to pursue a tax-free spin-off of its Precision Technologies segment, creating two independent publicly traded companies by the fourth quarter of 2025 [7]. - The new entity will focus on test and measurement technologies, specialty sensors, and aerospace and defense subsystems, with an emphasis on improving margins and cash flow [7]. - The company maintains its third-quarter and full-year 2024 outlook post-spin-off announcement, expecting its share buyback program to enhance EPS growth in 2025 [8]. Earnings Prediction - The Zacks model indicates a potential earnings beat for Fortive, supported by a positive Earnings ESP of +0.15% and a Zacks Rank of 3 [9].