Pentair Reports Second Quarter Sales Growth of 15%
Water delivered $549 million in sales, a 13% increase year-over-year
Pentair Inc. reported second quarter 2010 revenue of $796 million and net income from continuing operations attributable to Pentair Inc. of $60 million, or $0.61 per share. This represents an increase of 85% as compared to the $0.33 of earnings per share (EPS) in the second quarter last year. Adjusting second quarter 2009 for restructuring items, year-over-year adjusted EPS increased 61%.
Total company sales increased 15% to $796 million, compared with $694 million in the second quarter of 2009. Both Water and Technical Products posted double-digit sales gains, and growth was broad-based across end-markets served. The company delivered second quarter operating income of $100 million, up 58% year-over-year or up 51% compared to adjusted second quarter 2009 operating income. Overall, operating margins for the second quarter increased 300 basis points to 12.6% when compared to adjusted second quarter 2009 operating margins, driven by revenue growth and operational productivity.
The company generated strong free cash flow of $150 million for the quarter, with year-to-date free cash flow performance of $128 million, which is $29 million greater than the first half of 2009. The company said it is on track to achieve free cash flow of greater than $225 million for full year 2010.
"I am pleased with our second quarter performance, as strong execution of growth and productivity initiatives, along with improvement in market trends, enabled us to deliver double digit revenue gains and robust earnings growth. Pentair's strong market execution, innovation and growth in the U.S., Europe and China led the way in both Water and Technical Products," said Randall J. Hogan, Pentair chairman and CEO.
"Our lean cost structure and continued productivity efforts enabled us to significantly expand operating margins, while making continued incremental growth investments in product and market innovation," Hogan continued. "Our strong second quarter performance underscores the strength of our brands, channels and geographies, as well as our focused execution."
Water delivered $549 million in sales, a 13% increase year-over-year. Foreign exchange was neutral to revenue in the quarter.
Residential Flow sales were up 4% versus the year-ago quarter, reflecting share gains in the professional pump channel and strength in the agricultural business;
Residential Filtration sales were up 7% as fast growth regions increased double digits, while the U.S. market continued its modest recovery;
Pool sales were up 31% as the business continued to gain share with an expanded dealer base and healthy demand for energy-efficient Eco-Select products;
Engineered Flow sales were up 14% driven by strong municipal sales, while North American commercial water systems remained down, reflecting a weak commercial construction market; and
Filtration Solutions sales were up 8% led by strong sales in Food Service along with growth in global systems in China and India, which helped offset timing delays of larger municipal project sales.
Water's second quarter reported operating income totaled $76 million, up 53% as compared to $50 million in the same period last year. When compared to second quarter 2009 adjusted operating income of $51 million, second quarter 2010 operating margins increased by 330 basis points to 13.8%. The benefits from higher volumes, modest pricing and strong productivity more than offset increased costs related to material inflation, reinstated employee benefits and growth investments.