Fortive Lifts Annual Profit View as Automation Demand Drives Quarterly Beat
Wednesday, Oct 30, 2024 9:13 am ET
1min read Fortive Corporation (NYSE: FTV) has raised its full-year 2024 outlook following a strong third-quarter performance, driven by robust demand for automation solutions. The company's strategic focus on durable growth markets and resilient, high-quality recurring growth has enabled it to maintain a balanced perspective on its end markets, even in the face of short-term challenges.
In the third quarter of 2024, Fortive generated better-than-expected earnings and free cash flow, with revenues increasing 3% year-over-year to $1.54 billion. The company's adjusted operating profit margin expanded to 27%, up 90 basis points year-over-year, reflecting the positive impact of its disciplined application of the Fortive Business System. This operational excellence, combined with strong orders growth across all segments, has positioned Fortive for continued success.
Fortive's Intelligent Operating Solutions and Advanced Healthcare Solutions segments drove consistent and more profitable growth, with robust recurring revenue growth in both segments. The company's Precision Technologies segment also contributed significantly to its overall performance, with double-digit orders growth in the third quarter.
The company's strong performance has led to an updated outlook for 2024, with Fortive now forecasting double-digit growth in both earnings and cash flow. The company anticipates revenue of approximately $6.24 billion to $6.26 billion, diluted net earnings per share of $2.47 to $2.50, and adjusted diluted net earnings per share of $3.84 to $3.87.
Fortive's pending separation into two independent, publicly traded companies is expected to create two focused, independent public companies, both positioned to provide greater value to all stakeholders. The separation, if effectuated, will create a technology solutions company, retaining the Fortive name, and a new global industrial company consisting of the brands currently operating under the Precision Technologies business segment. This strategic move is expected to unlock shareholder value by enabling each company to pursue its own growth strategy and capitalize on its unique market position.
In conclusion, Fortive's strong third-quarter performance and raised full-year outlook demonstrate the company's ability to navigate market fluctuations and maintain consistent earnings and cash flow growth. With a focus on durable growth markets and resilient, high-quality recurring growth, Fortive is well-positioned to continue delivering value to shareholders. The company's pending separation into two independent companies further enhances its potential for future growth and value creation.
In the third quarter of 2024, Fortive generated better-than-expected earnings and free cash flow, with revenues increasing 3% year-over-year to $1.54 billion. The company's adjusted operating profit margin expanded to 27%, up 90 basis points year-over-year, reflecting the positive impact of its disciplined application of the Fortive Business System. This operational excellence, combined with strong orders growth across all segments, has positioned Fortive for continued success.
Fortive's Intelligent Operating Solutions and Advanced Healthcare Solutions segments drove consistent and more profitable growth, with robust recurring revenue growth in both segments. The company's Precision Technologies segment also contributed significantly to its overall performance, with double-digit orders growth in the third quarter.
The company's strong performance has led to an updated outlook for 2024, with Fortive now forecasting double-digit growth in both earnings and cash flow. The company anticipates revenue of approximately $6.24 billion to $6.26 billion, diluted net earnings per share of $2.47 to $2.50, and adjusted diluted net earnings per share of $3.84 to $3.87.
Fortive's pending separation into two independent, publicly traded companies is expected to create two focused, independent public companies, both positioned to provide greater value to all stakeholders. The separation, if effectuated, will create a technology solutions company, retaining the Fortive name, and a new global industrial company consisting of the brands currently operating under the Precision Technologies business segment. This strategic move is expected to unlock shareholder value by enabling each company to pursue its own growth strategy and capitalize on its unique market position.
In conclusion, Fortive's strong third-quarter performance and raised full-year outlook demonstrate the company's ability to navigate market fluctuations and maintain consistent earnings and cash flow growth. With a focus on durable growth markets and resilient, high-quality recurring growth, Fortive is well-positioned to continue delivering value to shareholders. The company's pending separation into two independent companies further enhances its potential for future growth and value creation.
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