Pentair Reports Third Quarter 2019 Results

Third quarter 2019 earnings per diluted share from continuing operations (“EPS”) were $0.54 compared to $0.52 in the third quarter of 2018. On an adjusted basis, the company reported EPS of $0.58 compared to $0.54 in the third quarter of 2018.

Third quarter 2019 operating income was $109 million, flat compared to operating income for the third quarter of 2018, and return on sales (“ROS”) was 15.2 percent, flat compared to the third quarter of 2018. On an adjusted basis, the company reported segment income of $123 million for the third quarter, up 1 percent compared to segment income for the third quarter of 2018, and ROS was 17.2 percent, an increase of 10 basis points when compared to the third quarter of 2018.

Net cash provided by operating activities of continuing operations was $167 million and free cash flow provided by continuing operations was $152 million for the quarter.

Pentair paid a regular cash dividend of $0.18 per share in the third quarter of 2019. Pentair previously announced on December 10, 2018 that its Board of Directors approved a 3 percent increase in the company s regular annual cash dividend rate for 2019 to $0.72 from $0.70, adjusted for the spin-off of nVent Electric plc. This marks the 43rd consecutive year that Pentair has increased its dividend.

John L. Stauch, Pentair’s President and Chief Executive Officer, commented: “Our third quarter results showed further signs of stabilization in our core business and we are encouraged by the segment income growth and ROS expansion. We are seeing solid underlying demand in many of our businesses. Throughout the year, we have continued to invest in our strategic growth priorities and we expect to remain positioned to return to core sales growth in 2020. We continue to see many paths of growth as we execute our strategy of being a leading water treatment company.”

Outlook
The company maintains its estimated 2019 GAAP EPS of approximately $2.09 and on an adjusted EPS basis of approximately $2.35. The company updates its full year 2019 sales guidance to approximately flat on a reported basis and approximately down 1 percent on a core basis compared to full year 2018. The company is targeting full year free cash flow to approximate adjusted net income.

In addition, the company introduces fourth quarter 2019 GAAP EPS of approximately $0.60 - $0.62 and on an adjusted EPS basis of approximately $0.64 - $0.66. The company expects fourth quarter sales to be up approximately 2 percent on a reported basis and approximately flat on a core basis compared to fourth quarter 2018.