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Pentair Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 26, 2010 01:15PM
Pentair Inc. (PNR) filed Quarterly Report for the period ended 2010-10-02. Pentair Inc. has a market cap of $3.5 billion; its shares were traded at around $35.45 with a P/E ratio of 19.2 and P/S ratio of 1.3. The dividend yield of Pentair Inc. stocks is 2.1%. Pentair Inc. had an annual average earning growth of 3.8% over the past 10 years.PNR is in the portfolios of Bill Frels of Mairs & Power Inc. , Columbia Wanger of Columbia Wanger Asset Management, Steven Cohen of SAC Capital Advisors, Manning & Napier Advisors, Inc, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:
Our Water Group has progressively become a more important part of our business portfolio with sales increasing from approximately $125 million in 1995 to approximately $1.8 billion in 2009. We believe the water industry is structurally attractive as a result of a growing demand for clean water and the large global market size (of which we have identified a target market totaling $60 billion). Our vision is to be a leading global provider of innovative products and systems used in the movement, storage, treatment and enjoyment of water. In the later part of 2008 and in 2009, sales revenues in water significantly declined due to the impact of the global recession. We have seen some improvement in the Water Group markets in 2010.
At the same time, we provided earnings guidance for the fourth quarter and full year 2010. We anticipate that fourth quarter sales growth will be in the mid-single digits, compared to the prior year quarter and reported earnings per share on a diluted basis will range from $0.42 to $0.47 in the fourth quarter.
On February 2, 2010, we initiated earnings guidance for the full year 2010 of a range of $1.75 to $1.90 per share from continuing operations on a diluted basis, which we adjusted on July 29, 2010 to $1.86 to $1.96 per share from continuing operations on a diluted basis and further adjusted on October 26, 2010 to $1.93 to $1.98 per share from continuing operations on a diluted basis.
Our full year 2010 outlook is based on several variables. First, our guidance anticipates revenue growth of approximately 12 percent as a result of improvements in overall market conditions, as well as the benefit from our growth initiatives, which we expect to bring our total revenue to approximately $3 billion for the full year. Second, based upon that revenue expectation, we project net earnings of $1.93 to $1.98 per share as a result of higher operating margins due to carryover of productivity gains from our restructuring projects in 2009 and ongoing productivity, offset partly by higher costs for certain raw materials, reinstatement of certain employee benefits and wage increases and increased investments on research and development and sales and marketing resources. Third, we expect a reduction in interest expense as a result of lower borrowing levels and lower interest rates. As noted previously, however, deterioration in general economic conditions in our primary markets and geographies would adversely impact our anticipated annual revenues and financial performance.
Stocks Discussed: PNR,