Watts Water Technologies (WTS) Tops Q4 EPS by 1c, Revenues Beat; Announces $150M Share Buyback

February 7, 2019 4:18 PM EST

Watts Water Technologies (NYSE: WTS) reported Q4 EPS of $0.88, $0.01 better than the analyst estimate of $0.87. Revenue for the quarter came in at $388 million versus the consensus estimate of $382.45 million.

  • 4Q18 sales increased 6% to $388 million; organic growth of 7%
  • 4Q18 operating margin of 11.7%; up 150 bps on GAAP basis, up 30 bps on adjusted basis
  • 4Q18 GAAP EPS of $0.85 increased $0.92 compared to prior year; results in 4Q17 include a tax charge of $0.73 per share related to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”)
  • 4Q18 adjusted EPS up 19% to $0.88
  • 2018 operating cash flow of $169 million and free cash flow of $136 million, a 9% and 7% increase, respectively, over the prior year
  • Announcing $150 million share repurchase program

“I am pleased that we finished the year with a strong fourth quarter. We continued to drive top-line growth and margin expansion, which as in prior quarters, was led by an excellent performance from the Americas,” said Chief Executive Officer Robert J. Pagano Jr. “We delivered record quarterly sales driven by solid organic growth in the Americas and Europe. We leveraged our incremental sales and the benefits from productivity and restructuring into higher operating income, and record fourth quarter operating margin and earnings per share.”

Commenting on the stock repurchase program, Mr. Pagano noted, “This action reflects our ongoing commitment to enhance shareholder value and to execute our balanced cash allocation strategy. We expect to use available cash to fund this program. We remain committed to our long-term growth strategy of growing the business organically and through acquisitions and we believe we will continue to have sufficient capital available to fund future acquisitions and innovative initiatives.”

Mr. Pagano concluded, “Our goals for 2018 were to accelerate organic growth, drive margin expansion and continue to reinvest in future growth and productivity initiatives. The team delivered on all counts, which drove record financial results for the year. We will continue to focus on these key metrics during the coming year. We also intend to introduce our smart and connected product strategy in 2019, which we believe will provide further differentiation for us in the marketplace.”

For earnings history and earnings-related data on Watts Water Technologies (WTS) click here.

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