Fortive's Q2 Earnings Miss Estimates, Revenues Beat, Stock Down

Core Insights - Fortive Corporation (FTV) reported second-quarter 2025 adjusted earnings per share (EPS) of 58 cents, missing the Zacks Consensus Estimate of 60 cents, but showing a year-over-year increase of 3.6% [1] - Revenues for the quarter declined by 0.4% year over year to $1.02 billion, surpassing the Zacks Consensus Estimate by 0.8% [1] - The company completed the spin-off of Ralliant, marking a strategic shift and aiming to accelerate profitable growth and maximize shareholder returns [3][4] Financial Performance - Adjusted gross profit decreased by 0.5% year over year to $650 million, with an adjusted operating margin of 26.7%, contracting by 40 basis points [10] - The Intelligent Operating Solutions segment generated revenues of $696.9 million, contributing 68.6% to total revenues, remaining almost flat year over year [6] - The Advanced Healthcare Solutions segment reported revenues of $319.5 million, down 1.3% year over year [6] Cash Flow and Shareholder Returns - As of June 27, 2025, cash and cash equivalents were $1.827 billion, up from $892.1 million as of March 28, 2025 [11] - Fortive generated an operating cash flow of $205 million for the second quarter, compared to $191.8 million in the previous quarter, and non-GAAP free cash flow was $180 million [11] - The company repurchased approximately $140 million worth of shares during the reported quarter, aligning with its capital deployment strategy [12] Future Outlook - Fortive anticipates third-quarter revenues to be roughly in line with the second quarter, with core revenue growth expected to be consistent with the first half [13] - The company projects fourth-quarter adjusted EPS to be significantly higher than the third quarter, while third-quarter adjusted EPS is expected to be slightly below second-quarter levels [15] - For the full year 2025, Fortive expects adjusted EPS from continuing operations to be in the range of $2.50 to $2.60 [15]