Watts Water Technologies (NYSE: WTS) reported Q1 EPS of $1.24, $0.24 better than the analyst estimate of $1.00. Revenue for the quarter came in at $413 million versus the consensus estimate of $386.01 million.

• Reported sales of $413 million increased 8%; organic sales increased 4%
• GAAP operating margin of 14.4% and adjusted operating margin of 14.5%; both up 190 bps
• GAAP EPS of $1.23 and adjusted EPS of $1.24; both up 31%
• Amended and extended existing credit facility in the second quarter; enhanced financial flexibility
• Increasing 2021 full year outlook

Chief Executive Officer Robert J. Pagano Jr. commented, “I want to thank all our employees and especially those involved in manufacturing, supply chain and logistics for their efforts in delivering a strong first quarter. The team overcame notable challenges in striving to meet our customer needs. Sales in all three regions exceeded our expectations. Drivers included an unexpected positive impact from this year’s freezing weather in the South-Central U.S. as well as higher sales in APMEA in the current quarter due to COVID-19’s impact last year. The higher sales, coupled with continued cost actions, drove solid operating margin expansion. Given our first quarter performance and current expectations for the second quarter, we are revising upward our outlook for the full year 2021.”

Mr. Pagano concluded, “Given the strong performance in the first quarter and better second quarter expectations, we have updated our full year outlook, and now anticipate that consolidated organic revenues may increase by 2% to 7% and consolidated adjusted operating margin may expand by 30 to 70 basis points, compared to last year. While encouraging, market uncertainties, including supply chain disruptions concerns, inflation and vaccine implementation outside of the United States require continued monitoring and could impact our second half performance. We maintain ample liquidity and continue to invest for the future. We have navigated the pandemic well and are a stronger, more agile company.”

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