Watts Water Technologies Inc Reports Second Quarter 2024 Financial Results
Intellectia.AI2024-08-08
Watts Water Technologies, Inc. Reports Second Quarter 2024 Financial Results
Watts Water Technologies, Inc. (NYSE: WTS) – a leading global manufacturer and provider of plumbing, heating, and water quality products and solutions – has announced its financial results for the second quarter of 2024.
Key Financial Metrics
| Metric | Q2 2024 Results | YoY Change Q2 2023 | Consensus Estimates |
|---|---|---|---|
| Total Revenue | $597M | +12% | $589.58M |
| Reported Earnings Per Share (EPS) | $2.44 | +8% | $2.33 |
| Adjusted EPS | $2.46 | +5% | NA |
| Reported Operating Margin | 18.7% | -10bps | NA |
| Adjusted Operating Margin | 18.8% | -70bps | NA |
Interpretation: Watts Water Technologies exceeded revenue and EPS consensus estimates with a reported revenue of $597 million, reflecting a 12% year-over-year increase. The company’s operating margins, however, declined slightly, indicating higher expenses or investment costs. Despite this, adjusted EPS grew by 5%, underscoring efficient cost management.
Revenue Performance by Segment
| Segment | Q2 2024 Revenue | YoY Change Q2 2023 | Organic Change | Comments |
|---|---|---|---|---|
| Americas | $448M | +22% | +5% | Growth due to pricing and acquisitions |
| Europe | $114M | -16% | -15% | Weak demand in OEM channel and adverse FX |
| APMEA | $35M | +16% | +18% | Growth in all major countries, project timing |
Interpretation: The Americas segment showed robust growth due to pricing and acquisitions. In contrast, the European segment faced substantial declines attributed to weak demand and unfavorable foreign exchange movements. APMEA displayed strong performance due to strategic project timings.
Operational Data
For the first six months of 2024: - Operating Cash Flow: $131M - Net Capital Expenditures: $11M - Free Cash Flow: $120M
Comments from Company Officers
Robert J. Pagano Jr., CEO, commented, "We delivered another quarter that surpassed our expectations with record sales, operating income, and EPS. Growth in our Americas and APMEA regions offset weakness in Europe. Our strong balance sheet will support strategic investments and capital return to shareholders."
Share Repurchase Program
The company repurchased approximately 20,000 shares at a cost of $4.1 million in Q2 2024. For the first half of 2024, 40,000 shares were repurchased at $8.1 million total. Approximately $4 million remains available under the 2019 stock repurchase program, and $150 million under the 2023 program.
Forward Guidance
The company maintains its full-year 2024 outlook with expected reported sales growth of +7% to +12%, and organic sales ranging from -4% to +1%. Full-year adjusted operating margin is projected between 17.1% and 17.7%.
Stock Price Movement
Following the earnings release, Watts Water Technologies' stock price declined by 1.38%.
Watts Water Technologies continues to navigate economic challenges adeptly with solid performance metrics and a maintained full-year outlook.
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