Fortive Q3 Earnings Beat Estimates, Revenues Up Y/Y, Outlook Raised
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Fortive Corporation FTV reported third-quarter 2024 adjusted earnings per share (EPS) of 97 cents, which topped the Zacks Consensus Estimate by 4.3%. The bottom line increased 14.12% year over year.
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Revenues rose 2.7% year over year to $1.54 billion. However, the top line missed the Zacks Consensus Estimate by 0.8%. Core revenues rose 1% year over year.
The year-over-year improvement in the top line was driven by continued momentum in Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS) along with the orders growth across all segments.
The software business segment experienced high single-digit growth in annual recurring revenues (ARR), while hardware orders were significantly bolstered by subsidiaries Fluke and Tektronix. Fluke introduced five major products in September, leading to a notable increase in orders across most regions. Meanwhile, investments in AI applications are fueling Tektronix’s expansion.
The company raised guidance for 2024 expecting double-digit growth in both earnings and cash flow in 2024. Revenues are now anticipated to be between $6.24 billion and $6.26 billion compared with the previous guidance of $6.25 billion and $6.3 billion, indicating 3% growth from the year-ago level. The Zacks Consensus Estimate is pegged at $6.28 billion.
Fortive Corporation Price and Consensus
Fortive Corporation price-consensus-chart | Fortive Corporation Quote
Management now projects adjusted net EPS between $3.84 and $3.87 compared with the previous guidance of $3.80 and $3.86. The Zacks Consensus Estimate is pegged at $3.82.Core revenue growth is anticipated to be 1% for the fourth quarter and the full year. Free cash flow is forecasted to be $1.365 million. For fourth-quarter 2024, adjusted net EPS is estimated to be in the range of $1.11-$1.14. Revenues are expected in the $1.63-$1.65 billion band. The Zacks Consensus Estimate for fourth-quarter EPS and revenues is pegged at 93 cents and $1.55 billion, respectively. Free cash flow is forecasted to be $425 million.
Fortive ramped up its share buyback initiative by repurchasing around 4 million shares in the third quarter, with the anticipated spin-off remaining on schedule, totaling around 6 million shares year to date.
Top Line in Detail
Fortive operates under the following three organized segments:
Intelligent Operating Solutions: The segment generated revenues of $661.2 million (contributing 43.1% to total revenues), up 2.6% on a year-over-year basis.
Precision Technologies: Segmental revenues totaled $550.9 million (35.9%), down 0.3% year over year. It is experiencing double-digit order growth.
Advanced Healthcare Solutions: This segment registered revenues of $322.5 million (21%), up 8.3% year over year.