Pentair Provides FY 2012 EPS Outlook of $2.60-$2.75 vs $2.78; Raises Dividend 10%

Pentair, Inc. PNR today provided its outlook for 2012 and updated its fourth quarter and full year 2011 sales and earnings outlook. For full year 2012, the company is providing a net earnings per diluted share from continuing operations (EPS) outlook of $2.60 to $2.75, which represents an increase of 9 to 15 percent from the mid-point of the updated, adjusted 2011 outlook. The company anticipates full year 2012 sales to be in the range of approximately $3.7 billion to $3.8 billion, or up 7 to 10 percent, which includes a three- to four-percentage point favorable impact from the CPT acquisition. The company expects to continue generating free cash flow in excess of net income for 2012. "Despite global economic uncertainties, we continue to expect solid sales and earnings growth in 2012," said Randall J. Hogan, Chairman and Chief Executive Officer. "We expect balanced growth in 2012, with a moderate volume increase, an improved price/cost dynamic and greater productivity and cost savings. We continue to make meaningful advancements in our strategy as we invest in innovation, technology and global capabilities that position us well to deliver long-term, sustainable growth." Pentair's board of directors approved an increase in the company's quarterly cash dividend of two cents per share, effective with the quarterly dividend payable in the first quarter of 2012. The new quarterly dividend equates to an annual cash dividend of $0.88 cents per share, representing a 10 percent increase from the previous $0.80 per share. Pentair expects fourth quarter 2011 reported EPS to be in the range of $0.51 to $0.53. Excluding acquisition related costs, the company expects adjusted fourth quarter 2011 EPS in the range of $0.53 to $0.55, which compares to a previous outlook range of $0.59 to $0.62. The updated outlook reflects lower than expected western European sales, along with lower than expected residential water treatment component volume and the related negative impact on operating income, offset, in part, by more productivity. The company expects further repositioning actions in the fourth quarter not yet reflected in this 2011 EPS outlook. As a result, Pentair now expects full year 2011 reported EPS in the range of $2.20 to $2.22. Excluding acquisition related costs and restructuring charges, the company expects adjusted full year 2011 EPS in the range of $2.38 to $2.40, an increase of 19 to 20 percent from the prior year. "Although we are disappointed with the lowered fourth quarter 2011 volume expectations, our updated outlook still reflects continued margin expansion and double digit earnings growth at the mid-point. We are seeing a more favorable price and cost environment, along with increased productivity and cost initiatives that we expect to accelerate into 2012. We will continue to invest and drive initiatives that strengthen our portfolio and position us well for sustainable, profitable growth next year and beyond."