NORTH ANDOVER, Mass. - Watts Water Technologies, Inc. (NYSE: NYSE:WTS), a global leader in plumbing, heating, and water quality solutions, reported a robust first quarter for 2024, surpassing analyst expectations.
The company announced an adjusted EPS of $2.33, which is $0.23 higher than the analyst estimate of $2.10. Revenue for the quarter was also strong at $570.9 million, exceeding the consensus estimate of $547.2 million and representing a significant 21% increase from $471.7 million in the same quarter last year.
Watts Water Technologies' performance was driven by a 6% organic sales growth, which includes about a 7% boost from additional shipping days.
Despite a reported operating margin decrease of 110 basis points to 16.9%, the adjusted operating margin improved by 30 basis points to 18.2%. The company also reported a 12% increase in reported EPS to $2.17 and a 21% rise in adjusted EPS.
CEO Robert J. Pagano Jr. expressed satisfaction with the record first quarter sales, operating earnings, adjusted operating margin, and EPS. He attributed the success to the company's focus on delivering quality solutions and value to customers.
Pagano also announced a 19% increase in quarterly dividend payments and raised the full-year 2024 sales and margin outlook. The company now expects organic sales growth ranging from -4% to 1%, with an adjusted operating margin between 17.1% and 17.7%.
The company's stock responded positively to the news, with shares edging up 2.1%, indicating investor confidence in the company's financial health and future prospects. This market movement aligns with the earnings beat as the primary driver of the positive response.
Watts Water Technologies' acquisitions, including Bradley Corporation, Josam Company, and Enware, are progressing well, and the company's balance sheet remains strong. Pagano highlighted the robust cash flow, which supports strategic investments, shareholder returns, and the execution of the company's long-term strategy.
For the first quarter of 2024, the company reported operating cash flow of $46 million and free cash flow of $37 million, both improvements from the previous year. The company also announced a 19% increase in quarterly dividend payments, starting in June 2024.
Watts Water Technologies continues to be a comprehensive supplier to the water industry, leveraging its expertise in a wide variety of water technologies. With the increased full-year 2024 outlook and strong first quarter performance, the company is well-positioned for continued growth and shareholder value creation.
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