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Jun 28, 2020
Watts Q2 2020 Earnings Report
Watts Water Technologies' second quarter results were announced, revealing decreased sales and earnings compared to the previous year.
Key Takeaways
Watts Water Technologies reported a 19% decrease in sales, both on a reported and organic basis, amounting to $339 million. GAAP EPS was $0.59, a 44% decline, while adjusted EPS was $0.74, a 32% decrease. Net income also fell by 45% to $20.2 million. The company acquired Australian Valve Group Pty Ltd (AVG) in an all-cash transaction on July 3, 2020.
Sales decreased by 19% on both reported and organic basis.
GAAP operating margin decreased by 380 bps; adjusted operating margin decreased by 220 bps.
GAAP EPS was $0.59 and adjusted EPS was $0.74, representing declines of 44% and 32%, respectively.
The company acquired Australian Valve Group Pty Ltd (AVG) in an all-cash transaction.
Watts
Watts
Watts Revenue by Segment
Watts Revenue by Geographic Location
Revenue by Segment
Americas Revenue
CapyFin.comEurope Revenue
CapyFin.comAPMEA Revenue
CapyFin.comRevenue by Geographic Location
Americas Revenue
CapyFin.comEurope Revenue
CapyFin.comAPMEA Revenue
CapyFin.com Forward Guidance
The company expects to see sequential volume and margin improvement in the third quarter of 2020.
Positive Outlook
- Expect to see sequential volume improvement in Q3 2020
- Expect to see sequential margin improvement in Q3 2020
- Continue to promote policies to ensure employees are working in a safe environment
- Balance sheet remains very strong
- Focused on long-term strategic priorities of increasing investment in innovation and positioning Watts for future growth
Challenges Ahead
- COVID-19 pandemic continued to negatively impact year-over-year comparisons
- Recorded restructuring and impairment charges that included costs for previously announced actions.
- Sales decreased 19% on both a reported and organic basis
- Reported operating margin decreased 380 basis points
- Adjusted operating margin decreased 220 basis points
Revenue & Expenses
Visualization of income flow from segment revenue to net income