Count Pentair PLC as the latest victim of the global downturn in oil production and energy consumption.
As it previously warned, Pentair reported weak first-quarter earnings, citing an economic head wind that "feels like a global spending pause."
The maker of industrial and residential pumps, filters and valves said first-quarter sales of $1.5 billion were down 10 percent from a year earlier and that earnings per share from continuing operations were down 8 percent to 65 cents. Net income for the quarter was $113.9 million, compared with $118.6 million a year earlier.
The company's biggest drop-off came in its valve and control division, which serves the oil and energy sector, where sales sank 19 percent to $429 million.
"We expect a challenging pricing environment," CEO Randy Hogan said of sales prospects in 2015 and 2016, especially in the energy category.
As recently as December, Pentair executives said they were expecting double-digit growth in profits in 2015, an estimate that was greatly scaled back in light of Tuesday's report.
Instead of earnings per share this year of $4.20 to $4.35, the company said 2015 earnings per share would be in the neighborhood of $3.80.
"We started the year much slower than we had originally anticipated, as a decline in oil prices and the strengthening dollar have led many of our customers to delay business," Hogan said during a conference call and in a statement to analysts. "We believe that Pentair is in the right markets for the long term, and we have detailed plans in place to work through anticipated near-term challenges."
Hogan said Pentair was experiencing a "global capital spending freeze that was not foreseen."
Pentair, based in Ireland but managed largely from Golden Valley, warned Wall Street earlier this month that first-quarter sales and earnings would be below previous expectations.
Nonetheless, Pentair's stock was down 3.6 percent to $61.77 in trading Tuesday. The stock is down more than 7 percent since the beginning of the year.
Hogan said oil, gas and energy sectors were particularly hard hit in previously fast-growing economies in such countries as Brazil and China. He said sales in those sectors in North America were relatively stable.
Delays for valves and controls for oil and gas projects are up 20 percent with no expedited equipment orders to offset that, Hogan said. "Some projects are off the list" entirely because of energy industry mergers, he added.
Looking forward, Pentair said it expects total sales in 2015 of $6.5 billion, a decline of up to 9 percent from 2014. But with "aggressive cost actions," the company said it expects to increase its earnings per share for the year by 1 percent to $3.80. That is far below its previous estimate for 2015 of $4.20 to $4.35.
Pentair also provides filtration and water quality systems and flow and filtration equipment for food and beverage systems.