Pentair Reports Q2 Results Above Expectation, Clocks 13% Revenue Growth

Pentair PLC PNR reported second-quarter net sales growth of 13% year-over-year to $1.06 billion and core sales growth of 12%, beating the consensus of $1.05 billion.
Adjusted EPS improved to $1.02 from $0.84 in 2Q21, beating the consensus of $1.00.
The gross margin contracted by 240 bps to 33.8%, operating income increased 17.9% Y/Y to $190.8 million, and margin expanded by 70 bps to 17.9%.
Consumer Solutions sales were up 19% Y/Y to $686.2 million, and return on sales was 24.7%, a decrease of 20 bps.
Industrial & Flow Technologies sales were up 4% Y/Y to $377.4 million and return on sales was 15.7%, flat.
Net cash provided by operating activities of continuing operations year-to-date was $176.3 million compared to $361 million a year ago, and free cash flow was $138.1 million.
3Q22 Outlook: Pentair expects EPS from continuing operations of $0.90 - $0.92 and adjusted EPS of $0.93 - $0.95, vs. the consensus of $0.95.
It expects sales to be up ~3% to 5% on a reported basis.
FY22 Outlook: Pentair expects adjusted EPS of $3.70 - $3.75 (prior view $3.70 - $3.80) vs. the consensus of $3.71. It sees sales growth of ~8% to 10% (prior view 9% to 11%) on a reported basis.
The updated guidance primarily reflects the negative impacts of foreign exchange and higher interest rates in addition to further margin expansion.
Price Action: PNR shares are trading higher by 1.13% at $47.43 on the last check Tuesday.

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