A week before its electrical unit splits into a separate company, Pentair PLC on Thursday reported an uptick in first-quarter sales and profits that beat analysts’ expectations.
First-quarter sales grew 7 percent to $1.3 billion, beating Wall Street’s average estimate of $1.25 billion. Adjusted profits jumped 35 percent to 88 cents per share, beating estimates by 5 cents a share. Including one-time items, profits were 58 cents per share, up from 44 cents for the same period a year ago.
Pentair, which is headquartered in England but largely managed out of Golden Valley, plans to spin off its electrical and thermal business into a separate company effective April 30. The spun-off entity will be called nVent Electric PLC and also will be headquartered in England, but largely run out of St. Louis Park.
The ongoing Pentair entity will focus on water-related filtration, pumps, pool and other water-affiliated products that are expected to generate annual revenue of about $2.8 billion.
In contrast, nVent Electric will make electrical enclosures, industrial and cargo cooling and heating systems, electrical-monitoring systems and other products. After the spinoff, nVent will employ about 9,000 people and have $2.1 billion in annual revenue.
Pentair officials on Thursday forecast full-year 2018 earnings from ongoing water operations of $1.75 to $1.80 a share. NVent Electric earnings for 2018 are expected to reach $1.38 to $1.48 per share.
“Pentair started 2018 building additional momentum on core sales growth in both the water and electrical segments,” said CEO and Chairman Randy Hogan. “In addition to improved core sales growth, both businesses delivered strong income growth and margin expansion.”
After April 30, Hogan will become the chairman of nVent and step down from his role as chairman and CEO of Pentair PLC.
On April 30, the nVent separation will be handled as a tax-free spinoff to Pentair shareholders. After April 30, any references to the nVent Electric business will be reported on Pentair’s documents as “discontinued operations,” officials said.
Pentair’s stock fell to $71.14, down 76 cents a share Thursday.