Even as water filtration giant Pentair scrambled this week to reschedule its third-quarter earnings announcement, it has been busy expediting shipments of pumps and related products to the East Coast to help areas drowned by superstorm Sandy.
Speaking with analysts during the quarterly earnings conference call Thursday, CEO Randy Hogan said he expects about $10 million in emergency product sales due to Sandy.
The help can't come soon enough as New York and New Jersey grapple with flooded streets, skyscrapers, basements, tunnels and homes.
Hogan noted that Pentair has a long history in keeping the Big Apple dry. Pentair provided pumps for 16 of the 18 pumping stations around New York City. The company is also well known for providing the massive pumps that helped dry out New Orleans before and after Hurricanes Katrina and Irene.
Analysts on the call expressed gratitude that Pentair delayed its originally scheduled earnings call from Tuesday, the day the storm hit, to Thursday. Several were calling from New York and said they were coping with power outages at home and transportation woes as many New York subways are still shut from flooding.
"On behalf of all the families that were affected by Sandy, including my own, I want to thank you guys for postponing the earnings call for a couple of days. It definitely helps," said Steven Winoker, an equity research analyst at Bernstein Research.
The Golden Valley-based company posted better-than-expected third-quarter earnings for its "legacy" businesses which include electrical enclosures, cooling products, pumps, filters, water treatment and pool products.
Results excluded Pentair's Sept. 28 merger with Tyco Flow Control, a move that doubled Pentair's size and expanded its expertise in valves and flow control, thermal and water treatment products. The acquisition also made Pentair a force in valve and flow controls for the oil and gas industries.
"We are excited about expanded opportunities across the combined company to accelerate both revenue growth and earnings," Hogan told analysts.
Excluding Tyco, acquisition and restructuring costs, Pentair saw profits rise 7 percent to $108 million, or 64 cents a share. Analysts largely expected 63 cents a share. Officials credited the results to improved prices and higher productivity in its factories and strong sales in Latin America and the Middle East.
Sales rose 1 percent during the quarter to $866 million, excluding foreign currency rate translations. When calculated using sales that were translated into U.S. dollars, sales fell 3 percentage points.
Pentair's legacy operations consist of two key businesses: water and fluid solutions and technical solutions.
Third-quarter water and fluid product sales were strong in agriculture, infrastructure and residential pool equipment, but were hurt by weakness in western Europe and by unusually dry weather in the United States.
The quarter's technical products business saw sales of industrial electrical enclosures rise, while cooling equipment sales were flat, and system and accessory sales fell 10 percent due to project delays in the data communications field.
Winoker noted that "the core legacy Pentair business was in line" with analysts' estimates. He wanted to know more, however, about Tyco Flow Control's performance during the third quarter, which officials didn't address at length. "It is not yet clear to us if the core TYC Flow Control business deteriorated in the quarter," Winoker said.
Hogan said there would be more details about the integration of Tyco Flow Control and Pentair during a Nov. 29 investors conference that will be held in New York.
But Hogan and CFO John Stauch gave analysts their forecast for the fourth quarter and full year. They expect price and cost improvements, an uptick in sales due to backlogged orders from municipal customers and rising housing starts in North America that will give business a boost.
Including restructuring and merger costs associated with Tyco, the company expects a loss of 17 to 22 cents per share for the fourth quarter and earnings per share of 92 cents to 97 cents for the full year.
With Tyco, fourth-quarter sales are expected to hit $1.8 billion. That compares with legacy Pentair's revenue of $866 million for fourth-quarter 2011.
Hogan added that he has visited 30 of Tyco's locations around the globe. Separately, a 40-person integration team is working with business units to maximize merger synergies, supplier arrangements and cross selling opportunities.
The new Pentair expects to spend about $40 million on integration costs over the next two years, including about $25 million to update signs and product brands in conjunction with the merger.
Dee DePass • 612-673-7725