Pentair's Q1 Earnings Surpass Estimates, Revenues Dip Y/Y

Pentair plc PNR posted adjusted earnings per share (EPS) of $1.11 for the first quarter of 2025, which beat the Zacks Consensus Estimate of $1.01 by a margin of 10%. The bottom line also topped its guidance of $1.00-$1.02 and marked an 18% improvement from the prior-year quarter.

Including one-time items, the EPS was 93 cents compared with the prior-year quarter’s 80 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Pentair Delivers Margin Expansion Despite Lower Sales

Net sales declined 1% year over year to $1.01 billion. The top line surpassed the Zacks Consensus Estimate of $984 million. Excluding the impacts of acquisitions, divestitures and currency translation, core sales declined 1%.

The cost of sales declined 3% year over year to $607 million. The gross profit was $403 million, up 3% from the prior-year quarter. The gross margin was 39.9% compared with the year-ago quarter’s 38.4%.

SG&A expenses totaled $177 million, down 5% from the prior-year quarter’s $185 million. Research and development expenses declined 2% year over year to $24 million.

The operating income, including one-time items, was $203 million, up 12% from the year-ago quarter. Operating margin was 20.1% compared with 17.8% in the year-ago quarter.

The adjusted segmental operating income increased 12% year over year to $242.5 million. The adjusted segmental margin was 24%, a 260-basis point expansion from the year-ago quarter.

PNR’s Segment Performances in Q1

Net sales in the Flow segment totaled $368 million, down 4.3% from the prior-year quarter. Our estimate for the segment’s net sales was $360 million. Adjusted operating earnings for the segment rose 8% year over year to $84 million. Our estimate for the segment’s operating profit was $79 million.

Net sales in the Water Solutions segment were down 5.5% year over year to $258 million. The segment’s earnings were $61 million compared with $56 million in the year-ago quarter. Both the sales and earnings figures met our estimates. 

Net sales in the Pool segment totaled $384 million, up 7% year over year. Our estimate for the segment’s net sales was $365 million. Operating earnings for the segment grew 13.7% year over year to $126 million. Our estimate for the segment’s operating income was $113.7 million.

Pentair’s Cash Flow & Balance Sheet Updates at Q1-End

Pentair had cash and cash equivalents of around $141 million at the end of the first quarter of 2025 compared with $119 million at 2024-end. Net cash generated from operating activities was $39 million in the first quarter of 2025 compared with $107 million in the prior-year quarter. 
The company had a long-term debt of $1.84 billion as of March 31, 2025, up from $1.64 billion as of Dec. 31, 2024.

Pentair had hiked its dividend by 9% to 25 cents per share in February. This marks the 49th consecutive year that the company has increased its dividend. 
Pentair repurchased 0.6 million of its shares for $50 million in the first quarter of 2025. As of March 31, 2025, the company had $400 million available under its share repurchase authorization.

PNR’s Guidance for Q2 & 2025

The company expects adjusted EPS to be in the range of $4.65-$4.80 for 2025. The mid-point of the range indicates year-over-year growth of 9%. Sales are expected to be flat to increase 2% on a reported basis from the 2024 level.

For the second quarter, the company expects an adjusted EPS between $1.31 and $1.35, implying a 9% rise at the midpoint. Pentair anticipates the quarter’s sales to mark a 1-2% increase from the year-ago quarter’s figure.

Pentair Stock’s Price Performance

Pentair stock has dipped 0.3% over the past year against the industry’s 6.3% growth.

PNR’s Zacks Rank

Pentair currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Pentair’s Peers Awaiting Results

Pool Corp. POOL is expected to release first-quarter 2025 results on April 24, 2025. The Zacks Consensus Estimate for POOL’s earnings is pegged at $1.09 per share, indicating a year-over-year decline of 23.24%.

The estimate for Pool Corp.’s top line is pegged at $1.09 billion, implying a decrease of 2.4% from the prior year’s figure. POOL has a trailing four-quarter average earnings surprise of 2.66%.

Xylem XYL, scheduled to release first-quarter 2024 results on April 29, has a trailing four-quarter average earnings surprise of 3.83%. The Zacks Consensus Estimate for Xylem’s earnings for the quarter is pegged at 95 cents per share, implying year-over-year growth of 5.6%.

The consensus estimate for Xylem’s top line is pegged at $1.67 billion, indicating a rise of 1.9% from the prior-year figure.

A. O. Smith AOS is scheduled to report first-quarter 2025 results on April 29. The Zacks Consensus Estimate for earnings is pegged at 90 cents per share, implying a 10% decline from the prior-year level.

The estimate for A. O. Smith’s revenues for the quarter is $949 million, indicating a 3% decline from the year-ago quarter. The company has average earnings surprise of a negative 1.10% in the past four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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