Water technologies giant Pentair Inc. announced second quarter earnings that beat analysts' expectations Tuesday and said it was restructuring its spa and bath business.
The maker of pool, spa and water filtration and pump equipment reported second quarter net earnings of $139.7 million or $1.39 a share -- more than double the $62 million or 61 cents a share a year ago.
Excluding special items, adjusted quarterly earnings were $68.1 million or 68 cents a share, a penny better than analysts expected. Sales rose 1 percent to $910 million during the quarter.
Pentair, whose headquarters are in Golden Valley, said it will shift three U.S. and three international water technology production plants to Mexico, China and other U.S. facilities in a move that will cut 40 cents a share in annual costs but incur a restructuring charge of 50 cents a share in the second half of this year.
The company also issued a tender offer to bondholders that is expected to cut its interest expense by a penny.
Officials also announced that the company had settled litigation related to an outbreak of Legionnaire's Disease in 1994 aboard the Celebrity Cruise Lines ship Horizon. The case involved Essef Corp., which Pentair acquired in 1999. The settlement resulted in a $20 million or 14 cents per share charge to earnings.
Going forward, officials said they expect 2008 earnings per share of $2.28 to $2.33, up 9 to 11 percent from 2007.
Sales for Pentair's largest division, the Water Group, fell 6 percent to $605 million because of softness in North American residential markets and inventory declines in pool equipment distribution. The Technical Products division rose 18 percent to $304 million from a year ago due to demand for thermal products and electrical enclosures.
"Overall, our businesses performed very well in the second quarter as we navigated through persistently soft residential markets and a weaker-than-expected residential pool market," said Randall Hogan, chairman and chief executive officer. "Our business diversity, growing international market penetration, and aggressive cost-takeout measures continue to enable us to meet the commitments we laid out earlier in the year."
Dee DePass • 612-673-7725
2nd quarter FY2008, 6/30
2008 2007 % chg. Revenue $909.8 $899.3 +1.2 Cont. ops. 138.7 60.9 +127.7 Disc. ops. -- 1.0 -- Extra -- 0.1 -- Income 138.7 62.1 +123.5 Earn/share 1.39 0.62 +124.2 6 months
Revenue $1,750.2 $1,692.1 +3.4 Cont. ops. 191.4 103.6 +84.8 Disc. ops. -1.2 0.5 -- Extra* -7.1 0.2 -- Income 183.0 104.3 +75.4 Earn/share 1.84 1.04 +76.9 Figures in millions except for earnings per share.
Extra is gain/loss on disposal of discontinued operations
