Pentair Beats Q4 Estimates, Raises Dividend, Guides Below Expectations For 2025

Pentair plc PNR shares are trading lower after the company reported a fourth-quarter 2024 net sales decline of 1% year over year (Y/Y) to $973 million, slightly beating the consensus of $972.8 million.

Also, core sales declined by 1% Y/Y in the fourth quarter, excluding currency translation, acquisitions, and divestitures.

Gross margin expanded to 38.8% from 37.2% a year ago in the quarter. Adjusted operating margin expanded 370 basis points Y/Y to 23.8% in the quarter.

Flow segment sales decreased by 5% Y/Y to $360.7 million, Segment income was $73.6 million (+13% Y/Y), and the operating margin was 20.4%, an increase of 320 bps Y/Y in the quarter.

Water Solutions segment sales were $257.9 million (-4% Y/Y), Segment income was $62.2 million (+21% Y/Y), and ROS was 24.1%, up 500 bps Y/Y.

Pool segment sales were $331.4 million (+5% Y/Y), Segment income was $119.4 million (+14% Y/Y), and ROS was 33.8%, up 250 bps Y/Y.

Adjusted EPS came in at $1.08, surpassing the consensus of $1.01.

For the year, the operating cash flow of continuing operations was $767 million, and the free cash flow from continuing operations was $693 million.

Dividend: Pentair paid a regular cash dividend of 23 cents per share in the fourth quarter of 2024.

On December 16, 2024, the company announced a quarterly cash dividend of 25 cents per share, payable on Feb. 7, 2025, to shareholders of record as of Jan. 24, 2025.

This represents an 8.7% increase from the previous 23 cents per share.

Buyback: In the quarter, Pentair repurchased 0.4 million shares for $50 million. As of Dec. 31, 2024, $450 million remained available under its share repurchase authorization.

Outlook: Pentair forecasts first-quarter adjusted EPS of $1.00-$1.02 (vs. consensus of $1.09), with sales down 3%-4%.

For 2025, the company expects adjusted EPS of $4.65-$4.80 (vs. street view of $4.82) and sales flat to up 2%.

John L. Stauch, Pentair’s president and chief executive officer said, ”We expect to continue to invest in key areas across the company and execute on our Transformation initiatives and 80/20 to drive long-term growth, profitability and returns.”

”We believe our balanced water portfolio is proving its resilience as Pool is expected to grow offsetting our Flow and Water Solutions residential end markets that remain pressured by higher interest rates. We are confident in our strategy and our ability to control what we can internally while mitigating risk from an uncertain macroeconomic and geopolitical environment near-term.”

Investors can gain exposure to the stock via Invesco Global Water ETF PIO and Global X Clean Water ETF AQWA.

Price Action: PNR shares are down 2% at $100.41 at the last check Tuesday.

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