Pentair plc (PNR) Fourth quarter earnings and revenue beat estimates

Pentair plc (PNR) exited with quarterly earnings of $0.87 per share, beating Zacks consensus estimate of $0.85 per share. That compares to earnings of $0.70 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of 2.35%. A quarter ago, this company was expected to post earnings of $0.84 per share when it actually produced earnings of $0.89, delivering a surprise 5.95%.

In the past four quarters, the company has exceeded consensus EPS estimates four times.

Pentair plc, which is part of the Zacks Manufacturing – Thermal Products industry, posted revenue of $988.6 million for the quarter ended December 2021, beating Zacks’ consensus estimate by 4.24%. That compares to revenues of $796 million a year ago. The company has exceeded consensus revenue estimates four times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Shares of Pentair plc have lost around 12.8% since the start of the year compared to a decline of -5.3% for the S&P 500.

What’s next for Pentair plc?

While Pentair plc has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this publication of results, the trend of revisions to estimates for Pentair plc: unfavourable. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a Zacks No. 4 (sell) ranking for the stock. Thus, stocks are expected to underperform the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.90 on $956.28 million in revenue for the upcoming quarter and $3.77 on $4 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Manufacturing – Thermal Products currently sits in the bottom 23% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Zebra Technologies (ZBRA), has not yet released its results for the quarter ended December 2021. The results are expected to be released on February 10.

This maker of barcode, plastic card and RFID tag printers is expected to post quarterly earnings of $4.32 per share in its next report, a year-over-year change from -3.1%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Zebra Technologies’ revenue is expected to be $1.45 billion, up 10.6% from the year-ago quarter.

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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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