Watts Water Technologies (NYSE: WTS) reported Q2 EPS of $0.74, $0.35 better than the analyst estimate of $0.39. Revenue for the quarter came in at $339 million versus the consensus estimate of $315.64 million.

• Reported sales of $339 million, down 19% on both reported and organic basis
• GAAP operating margin of 9.2%, down 380 bps; adjusted operating margin of 11.1%, down 220 bps
• GAAP and adjusted EPS of $0.59 and $0.74, representing declines of 44% and 32%, respectively
• Recorded $6.7 million of restructuring, impairment and other charges
• Generated operating cash flow of $47 million and free cash flow of $25 million year-to-date, approximately 140% and 360% increase, respectively, over same period last year
• Acquired Australian Valve Group Pty Ltd (AVG) in an all-cash transaction on July 3, 2020

Chief Executive Officer Robert J. Pagano Jr. commented, “During the past quarter, our employees worldwide continued to manufacture, assemble and deliver essential products, supporting our customer needs under very challenging circumstances. I want to thank everyone for their outstanding efforts. As a company, we continue to promote policies to ensure employees are working in a safe environment, whether that’s from home, on the shop floor or in the office.”

Regarding second quarter results, Mr. Pagano noted, “Although the COVID-19 pandemic continued to negatively impact year-over-year comparisons, second quarter sales and adjusted operating margin were both better than we had anticipated, with order rate declines moderating as the quarter progressed and as government restrictions eased. During the quarter, we recorded restructuring and impairment charges that included costs for previously announced actions. We remain focused on our long-term strategic priorities of increasing investment in innovation and positioning Watts for future growth. Our balance sheet remains very strong. We retired $75 million of higher interest notes payable in June. Looking ahead, we expect to see sequential volume and margin improvement in the third quarter of 2020.”

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