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MINNESOTA, Aug. 2, 2011 /PRNewswire-Asia/ -- Pentair, Inc. (NYSE: PNR) announced second quarter 2011 sales of $910 million, an increase of 14 percent from the same quarter last year. These results reflected broad-based growth across its two segments, Water and Technical Products, including 7 percentage points from the recent acquisition of Norit's Clean Process Technologies (CPT) and 3 percentage points from favorable foreign currency. Earnings per diluted share from continuing operations (EPS) were $0.67 in the second quarter 2011. Adjusting to exclude acquisition related costs, second quarter 2011 EPS was $0.75, an increase of 23 percent over the same quarter last year.
"Pentair delivered another strong quarter. Successful execution of our growth initiatives, including an increasing presence in fast growth markets, continued innovation and an expanding portfolio of energy-efficient and sustainable products, led to higher sales in the quarter," said Randall J. Hogan, Pentair chairman and chief executive officer. "The volume benefit, along with productivity gains and pricing actions, resulted in meaningful margin expansion and earnings growth."
"We are very excited about the recently completed CPT acquisition, adding global reach, innovative membrane technologies and system capabilities in the attractive water and beverage sectors. The CPT business, now part of Pentair Filtration Solutions, is off to a great start," added Hogan.
The company reported second quarter operating income of $109 million compared to $100 million in the prior year quarter. Adjusting to exclude acquisition related costs, operating income was $121 million, up 21 percent, and operating margins expanded in both Water and Technical Products.
The benefit from higher sales volume, pricing and productivity gains more than offset the inflation impact. Second quarter 2011 results included the benefit of a lower effective tax rate, reflecting a favorable geographic mix largely resulting from the CPT acquisition and a reduction related to a state tax law change.
Free cash flow was $179 million in the second quarter, resulting in $117 million for the first half of 2011. The company said it expects to achieve free cash flow greater than $250 million for the full year 2011.
SECOND QUARTER BUSINESS HIGHLIGHTS
Water sales grew 15 percent year-over-year to $632 million, including 10 percentage points from the CPT acquisition and a three-percentage point favorable impact from foreign currency. Year over- year sales growth was negatively impacted by approximately 2 percentage points due to sales in 2010 related to the Gulf Intracoastal Waterway (GIWW) project. Within Water, U.S. sales were up modestly, while Western Europe and fast growth regions continued to deliver double-digit growth. Within the five Water global businesses, the second quarter sales performances were as follows:
Water's second quarter reported operating income totaled $85 million. Excluding the acquisition related costs included in the Water segment, second quarter operating income increased 18 percent to $90 million and operating margins increased 40 basis points to 14.2 percent. Pricing and productivity improvements, along with volume leverage, more than offset the negative impact from inflation and continued growth investments.
OUTLOOK
The company expects full year 2011 reported EPS to be in the $2.27 to $2.35 range, including approximately $0.15 of acquisition related costs. Excluding these costs, the company is raising its full year 2011 adjusted EPS guidance to a range of $2.42 to $2.50, reflecting the strong second quarter performance and benefit from the CPT acquisition. This represents an increase of 21 to 25 percent compared to 2010 EPS on expected full year 2011 sales of approximately $3.5 billion, up 14 to 16 percent compared to the prior year.
Pentair introduced third quarter 2011 EPS guidance of $0.51 to $0.54, which includes an estimated $0.04 impact from acquisition related costs. As a result, the company expects an adjusted EPS of $0.55 to $0.58 in the third quarter 2011, on an estimated sales growth of 12 to 14 percent. "Our updated guidance reflects our strong second quarter performance and the added benefit of the new CPT acquisition. With our increased presence in fast growth markets, strong innovation and continued application of lean enterprise practices, we believe we are well positioned to deliver over 20 percent adjusted earnings growth in 2011," added Hogan.
ABOUT PENTAIR, INC.
Pentair (www.pentair.com ) is a global diversified Minnesota. Its Water Group is a global leader worldwide in the movement, treatment, storage Group is a leader in the global enclosures and manufacturing thermal management products protect sensitive electronics and the people that employs over 15,000 people worldwide.
