Franklin Electric (NASDAQ: FELE) reported Q3 EPS of $0.63, $0.04 worse than the analyst estimate of $0.67. Revenue for the quarter came in at $341.9 million versus the consensus estimate of $342.23 million.

Gregg Sengstack, Franklin Electric’s Chairman and Chief Executive Officer, commented:

“Our third quarter earnings were a record for any third quarter in the Company’s history. Our earnings per share grew by over 20 percent from the third quarter 2017. Our consolidated organic sales growth before the impact of foreign exchange was about 8 percent, led by 49 percent organic growth in our Pioneer branded dewatering equipment products and 22 percent organic growth in our Fueling Systems business.

Our results were negatively impacted by a significant and unexpected strengthening of the U.S. dollar in the quarter against many developing world currencies which lowered our overall net sales by $11.2 million, or 4 percent and lowered our operating income by an estimated $1.6 million or about 5 percent versus the third quarter of last year. In addition, we had below the operating income line transactional foreign exchange losses of $1.6 million in the quarter as the sudden declines in the Turkish Lira, South African Rand, and Brazilian Real versus the U.S. dollar exposed us to short term liability valuation adjustments, primarily in August. The combined impact of foreign exchange reduced our earnings per share by about $0.05.”

Outlook

“As we look to the end of 2018, there are two primary issues that we believe will result in our full year 2018 earnings per share to be below our current guidance of $2.27 to $2.37 before restructuring expenses:

1. we will not recover the impact of the foreign exchange headwinds we experienced in the third quarter which we believe negatively impacted EPS by five cents, and;
2. continued uncertainty in some international Water Systems end markets will likely continue.

As a result, we are revising our 2018 full year EPS to now be between $2.22 and $2.26.”

GUIDANCE:

Franklin Electric sees FY2018 EPS of $2.27-$2.26, versus the consensus of $2.27.

For earnings history and earnings-related data on Franklin Electric (FELE) click here.