Watts Water Technologies Earnings: Here’s Why the Stock is Up Now

Watts Water Technologies, Inc. (NYSE:WTS) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.19%.

Watts Water Technologies, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 7.55% to $0.57 in the quarter versus EPS of $0.53 in the year-earlier quarter.

Revenue: Rose 0.05% to $371.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Watts Water Technologies, Inc. reported adjusted EPS income of $0.57 per share. By that measure, the company beat the mean analyst estimate of $0.55. It missed the average revenue estimate of $376.24 million.

Quoting Management: David J. Coghlan, Chief Executive Officer, commented, “Our organic growth in the North American wholesale and OEM markets was solid during the second quarter due to continued expansion in new residential construction and a stable repair and replace end market. We made good progress with our lead free initiative, commissioning the new foundry in June. In EMEA, we saw continued declines in the French and German markets, partially offset by continued growth from export sales into the Middle East, Eastern Europe and our drains business. Asia’s 26.2% organic sales growth was driven principally by residential plumbing and heating product sales. As the year continues, EMEA will continue to be challenged by macro-economic issues and we are taking the appropriate costs actions to deal with the expected volume decline. We expect to see further acceleration of our North America customers’ transitioning to lead-free products and continued strong growth in our Asian business.”

Key Stats (on next page)…

Revenue increased 2.54% from $362.1 million in the previous quarter. EPS increased 16.33% from $0.49 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.67 to a profit $0.64. For the current year, the average estimate has moved down from a profit of $2.48 to a profit of $2.36 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)