Tuesday, water systems maker Pentair, Inc. (PNR) reported a higher profit for the fourth quarter on lower expenses even though revenues dropped 9%. The company also provided earnings guidance for the first quarter and full year 2010, which are in line with the current Street estimates.
The Golden Valley, Minnesota-based company's fourth-quarter net income from continuing operations increased to $29.22 million or $0.29 per share from $21.16 million or $0.05 per share a year ago. Earnings per share increased 32% when compared to the year-earlier quarter.
Excluding a negative $0.18 per share impact from restructuring and impairment charges, fourth quarter earnings increased to $0.47 per share from $0.41 per share in the comparable quarter last year.
On average, 15 analysts polled by Thomson Reuters estimated earnings of $0.43 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted net income from continuing operations declined to $19.12 million or $0.20 per share from $37.12 million or $0.38 per share in the fourth quarter of 2008.
Revenues for the fourth quarter decreased 9% to $702 million from $768 million in the fourth quarter of 2008. Analysts expected revenues of $661.83 million for the quarter. Gross profit for the quarter decreased to $212.46 million from $229.49 million a year ago.
Operating income for the quarter increased to $52.49 million from $45.20 million in the prior-year quarter. Operating income increased as selling, general, and administrative expenses dropped to $145.35 million from $169.15 million last year, as well as the decline in research and development expenses to $14.62 million from $15.15 million in the similar quarter last year. The positive impact on operating margins from productivity and material savings more than offset the negative impact from lower volumes.
Commenting on the fourth quarter results, Randall Hogan, chief executive officer of Pentair, said, "We exited 2009 with a keen sense of achievement as both our fourth quarter operating margins and EPS grew year over year despite a sales decline. We continue to benefit from tremendous productivity actions and, despite continued year-over-year sales declines, we saw volumes improve sequentially in the fourth quarter in many of our key markets."
Segment wise, revenue from The Water Group declined 7% to $475 million, while revenue from technical products dropped 12% to $227 million from a year ago. Excluding the impact of foreign exchange, revenue from The Water Group declined 9% whereas technical products revenue fell 15%.
In the technical products segment, global electrical sales were down 16% as industrial customers continue to reduce capital projects and distributors are maintaining reduced inventory levels. Global electronic sales, another subcategory of technical products, recorded a sales decline of 7% as growth in Asian markets could not overcome declines in North American and European markets.
For fiscal year 2009, the company reported net income from continuing operations of $115.51 million or $1.17 per share, a steep fall from the $256.36 million or $2.31 per share reported in 2008. Total sales decreased 20% to $2.69 billion from $3.35 billion in 2008.
Commenting on the full year results, Hogan said, "Pentair combated the global recession and delivered dependable results in 2009 by significantly reducing our structural costs while maintaining investments in innovation and global growth."
Looking forward to the first quarter of fiscal 2010, the company revised its earnings guidance to a range of $0.32 to $0.35 per share, which is an increase of over 60% year over year when compared to adjusted first quarter 2009 earnings. On December 17, 2009, the company predicted that its first quarter baseline earnings estimate would equal or exceed $0.30 per share. On average, analysts currently expect earnings of $0.33 per share for the first quarter.
The company also updated its full year 2010 earnings guidance range to $1.75 to $1.90 per share, which is an increase of 19% to 29% versus 2009 adjusted earnings. Earlier, guidance for the full year was earnings in the range of $1.25 to $1.29 per share, or $1.40 to $1.44 per share excluding special items. Analysts, on average, currently estimate earnings of $1.80 per share for the full year.
The company now expects full year 2010 free cash flow to equal or exceed net income, compared to the earlier guidance of more than $225 million.
At the end of the fourth quarter, the company had cash and cash equivalents of $33.40 million, compared to $39.34 million at the end of the fourth quarter last year.
PNR is gaining $0.05 or 0.16%, and is currently trading at $31.40 on a volume of 585 thousand shares on the New York Stock Exchange.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.