Watts Water(US:WTS) ZACKSยท2025-05-08 15:05Core Insights - Watts Water Technologies, Inc. (WTS) reported first-quarter 2025 adjusted earnings per share (EPS) of $2.37, an increase from $2.33 in the prior-year quarter, exceeding the Zacks Consensus Estimate by 11.8% [1] - The company's quarterly net sales declined 2% year over year to $558 million, surpassing the Zacks Consensus Estimate by 3.2% [1] Sales Performance - Incremental acquisition sales in the Americas contributed $5 million, accounting for 1% of the reported growth, while organic sales declined by 2% year over year [2] - In the Americas, net sales were flat at $418 million, with organic sales dipping 1% due to fewer shipping days, resulting in an approximate 3% fall [3] - Europe experienced a 12% year-over-year decline in net sales to $108 million, with organic sales down 9% [4] - APMEA saw a 9% increase in net sales to $32 million, with organic sales rising 13% [5] Profitability Metrics - Gross profit increased by 1.9% year over year to $272.5 million, while operating income fell by 9.3% to $87.7 million [6] - The adjusted operating margin improved by 80 basis points year over year to 19% [6] Cash Flow and Liquidity - For the first quarter ended March 31, 2025, Watts Water generated $55.2 million in cash from operating activities, up from $45.6 million in the prior-year period [9] - Free cash flow increased to $45.6 million compared to $36.6 million a year ago [9] - As of March 31, 2025, the company had $336.8 million in cash and cash equivalents, with $197.2 million in long-term debt [10] Guidance - For 2025, the company updated its guidance for reported sales, expecting a range from a decline of 2% to an increase of 3% [11] - The adjusted EBITDA margin is anticipated to be between 20.4% and 21.0%, indicating an improvement of 30 to 90 basis points [11] - For the second quarter of 2025, reported sales are expected to increase by 1-4%, with organic sales projected to remain flat to increase by 3% [12]