Pentair (PNR) to Release First Quarter Results: What’s Coming?

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Pentair plc PNR is expected to release its first quarter 2022 results on April 21, before the opening bell.

4th quarter results and history of surprises

Pentair’s revenues and profits improved in the fourth quarter of 2021, helped by strong demand in residential-focused businesses, as well as the ongoing recovery in commercial and industrial businesses. The company beat Zacks’ consensus estimate for both metrics.

The company has an impressive track record of earnings surprises. Pentair has exceeded earnings estimates in each of the past four quarters, with the average surprise being 11.5%.

Pentair plc Price and surprise EPS

Pentair plc price-eps-surprise | Quote Pentair plc

First quarter estimates

Zacks’ consensus estimate for first-quarter revenue is pegged at $952 million, indicating 9.9% growth from the figure reported a year ago. The same for earnings is pegged at 81 cents, suggesting somewhat flat year-over-year performance. The Zacks consensus estimate for quarterly earnings has remained unchanged for the past 30 days.

What the Zacks Model Reveals

Zacks’ 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 of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating estimates. This is not the case here, as you will see. You can see the full list of today’s Zacks #1 Rank stocks here.

ESP Earnings: The ESP on earnings for Pentair is 0.00%. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Zacks Rank: Pentair currently carries a Zacks rank #4 (sell).

Key Factors to Note

Pentair has seen a solid improvement in its residential business in recent quarters as consumers stayed home amid concerns about the emergence of different variants of the COVID-19 virus. Thus, they spent to improve their quality of life at home by investing in swimming pools.

Apart from the construction of swimming pools, the demand for swimming pool maintenance has been strong. The impacts of robust demand and the near-record order backlog at the end of 2021 should be reflected in the results of the first quarter of 2022.

Nearly 80% of Pentair’s Consumer Solutions segment serves residential markets. Robust demand should be reflected in first quarter results. The rest of the segment’s revenue comes from commercial activity, which has recovered recently with the reopening of the restaurant and hotel sectors. The company’s efforts to grow in the swimming pool and residential and commercial water treatment businesses through acquisitions, introduction of water treatment solutions, investments and development. innovations likely contributed to the performance of the Consumer Solutions segment in the quarter to report.

Zacks’ consensus estimate for Consumer Solutions segment revenue is currently pegged at $589 million, suggesting a 13% improvement over the prior year quarter. The segment’s operating profit consensus mark for the quarter is pegged at $134 million, indicating 2% year-over-year growth.

Activities in commercial and industrial enterprises have recently resumed. This, in turn, likely contributed to the performance of the Industrial & Flow Technologies segment in the quarter ended March. Zacks’ consensus estimate for Industrial & Flow Technologies segment revenue is set at $364 million, indicating a 6% improvement over the prior year quarter. The segment operating profit consensus mark was $52 million, suggesting growth of 4% from the $50 million recorded a year ago.

Pentair has witnessed inflationary increases due to high demand and limited supply of raw materials such as metals, resins and electronics, as well as rising logistics costs. Although it undertook pricing actions and focused on productivity improvements that may have offset these increases, supply chain pressures and inflationary increases likely weighed on performance in the quarter.

Price performance

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Image source: Zacks Investment Research

Shares of the company are down 28.2% so far this year, compared to a 32% drop in the sector.

Stocks are poised to beat earnings estimates

Here are a few Industrials stocks you can consider as our model shows they have the right combination of elements to post a pace of earnings in their upcoming releases:

A. O. Smith AOS currently has an earnings ESP of +1.99% and a Zacks ranking of 3. The company’s Zacks consensus estimate for Q1 2022 revenue is set at $970 million, indicating a 26.2% year-over-year growth.

Zacks’ consensus estimate for AO Smith’s first-quarter 2022 earnings of 76 cents points to 27% year-over-year growth. AOS earnings have exceeded the consensus mark for the past four quarters, with the average surprise being 13.7%.

Eaton Company ETN has a +0.85% Earnings ESP and a #3 Zacks Rank. Zacks’ consensus estimate for the company’s revenue of $4.81 billion for the first quarter of 2022 points to 2.5% year-over-year growth.

Zacks’ consensus estimate for the company’s Q1 2021 earnings is currently pegged at $1.60, suggesting 11% year-over-year growth.

ETN earnings have exceeded the consensus mark in each of the past four quarters, with the average surprise being 7%.

Mueller Water Products MWA has an earnings ESP of +0.08% and a Zacks rank of No. 3. Zacks’ consensus estimate for company revenue of $294.5 million for the first quarter of 2022 indicates growth 10% year over year.

Mueller Water’s earnings consensus mark for the quarter under review is set at 15 cents, implying growth of 7% from the prior year quarter. The company has exceeded estimates in three of the last four quarters, while missing on one occasion, with the average surprise being 11.5%.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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