Will Lower Water & Flow Volumes Impact Pentair's Earnings in Q3?
Pentair plc PNR is set to release its third-quarter 2024 results on Oct 22, before the opening bell.
The Zacks Consensus Estimate for PNR’s third-quarter revenues is pegged at $989.9 million, indicating a 1.9% fall from the year-ago reported figure.
The consensus estimate for earnings is pegged at $1.07 per share. The Zacks Consensus Estimate for PNR’s third-quarter earnings has been unchanged for the past 60 days. The estimate indicates year-over-year growth of 13.8%.
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Pentair’s Solid Earnings Surprise History
PNR’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 4.9%. This is depicted in the following chart.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
What the Zacks Model Unveils for PNR
Our proven model does not conclusively predict an earnings beat for Pentair this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here, as you can see below.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: Pentair has an Earnings ESP of 0.00%.
Zacks Rank: Pentair currently carries a Zacks Rank of 2.
Factors Likely to Have Shaped Pentair’s Q3 Performance
PNR’s pool segment has returned to volume growth in second-quarter 2024, after five consecutive quarters of declines. This trend is expected to have continued in the to-be-reported quarter. We, thus, expect volume to grow 2.3% year over year in the third quarter. Pricing is expected to have a favorable impact of 0.6%. The Pool segment’s sales are projected to be $315 million, indicating year-over-year growth of 2.2%.
However, the Flow and Water Solutions segments continue to bear the impacts of a weak residential market due to high interest rates.
We expect the Flow segment’s revenues to be $385 million, indicating a decline of 3.8% from the prior-year quarter’s actual. Residential and agriculture verticals have been impacted by high interest rates, and the ongoing weakness in industrial verticals is expected to have weighed on volumes. Our model projects a 4.4% year-over-year decline in volumes, while pricing is expected to have a positive impact of 1.1%.
Our model predicts the Water Solutions segment’s net sales to decline 3.9% year over year to $288 million. Ongoing weakness in the residential vertical is expected to lead to a 4.4% dip in volumes, likely offset by a 1.1% rise in pricing.
Pentair has been witnessing a tight supply of raw materials, along with rising logistics costs. Despite the weakness in the water and flow segments, and cost headwinds, the company has delivered margin expansion across its segments, aided by pricing, cost savings and gains from its Transformation initiatives. We expect this to have continued in the third quarter as well.
PNR’s Share Price Lags Industry
Pentair shares have gained 54.1% in the past year compared with the industry’s 57.1% growth.
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Stocks That Warrant a Look
Here are some companies with the right combination of elements to post an earnings beat in their upcoming releases.
Crane Company CR is scheduled to release its third-quarter 2024 results on Oct. 28. It has an Earnings ESP of +0.63% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CR’s earnings is pegged at $1.31 per share, which indicates year-over-year growth of 27.2%. It has a trailing four-quarter average surprise of 11.2%.
Ingersoll Rand Inc. IR, scheduled to release its third-quarter 2024 on Oct. 31, has an Earnings ESP of +1.34% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Ingersoll Rand’s third-quarter 2024 earnings is pegged at 82 cents per share, suggesting year-over-year growth of 6.5%. It has a trailing four-quarter average surprise of 11%.
Eaton Corporation plc ETN, expected to release earnings soon, currently has an Earnings ESP of +0.48% and a Zacks Rank of 2.
The consensus estimate for Eaton’s earnings for the third quarter of 2024 is pegged at $2.80 per share, indicating year-over-year growth of 13.4%. ETN has a trailing four-quarter average surprise of 4.7%.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
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Pentair plc (PNR) : Free Stock Analysis Report
Crane Company (CR) : Free Stock Analysis Report