Pentair 2025 Q2 Earnings Misses Targets as Net Income Declines 20.2%

Pentair reported its fiscal 2025 Q2 earnings on July 22, 2025. The results fell short of analysts' expectations with net income declining by 20.2% compared to the same quarter last year. Despite the decline, Pentair raised its full-year 2025 sales guidance, forecasting growth between 1% to 2%. Adjusted EPS is expected to increase by 11% from 2024, ranging from $4.75 to $4.85. For the third quarter, the company anticipates sales to be flat to up 1%, with adjusted EPS guidance set at approximately $1.16 to $1.20.

Revenue

Pentair's total revenue in the second quarter of 2025 rose by 2.2% to $1.12 billion, compared to $1.10 billion in the same period in 2024. The Flow segment contributed $397.30 million, while Water Solutions generated $298 million. The Pool segment saw a notable increase, with revenues reaching $427.20 million. Additionally, the Corporate and other segment added $300,000 to the overall revenue.

Earnings/Net Income

Pentair's EPS decreased by 19.6% to $0.90 in Q2 2025, down from $1.12 in Q2 2024. The company's net income fell 20.2% to $148.50 million from $186.10 million in the previous year. Despite this decline, Pentair's long-standing profitability showcases its operational resilience.

Post Earnings Price Action Review

The strategy of buying Pentair shares following an earnings beat and selling after 30 days yielded a return of 41.90%, significantly lagging behind the benchmark return of 88.65%. Despite having a moderate risk-adjusted Sharpe ratio of 0.40, the strategy presented no downside risk, indicated by a maximum drawdown of 0.00%. This absence of downside risk might be concerning for investors who prioritize both growth and capital preservation. The approach highlights the challenges of balancing risk and reward in a volatile market environment, emphasizing the need for strategic adjustments to enhance returns while safeguarding capital.

CEO Commentary

John L. Stauch, President and CEO, highlighted Pentair's record quarter amid challenging conditions, noting a 2% sales increase and a 9% rise in Pool sales. He affirmed the importance of transformation initiatives to drive shareholder value and acknowledged residential market softness. Stauch emphasized operational efficiency and strategic growth investments, maintaining optimism about future opportunities as interest rates are expected to decline.

Guidance

Pentair has raised its full-year 2025 sales guidance, projecting growth between 1% and 2%. Adjusted EPS is anticipated to be approximately $4.75 to $4.85, reflecting an 11% increase from 2024. For Q3 2025, sales are expected to be flat to up 1%, with adjusted EPS guidance of $1.16 to $1.20. The impact of tariffs is forecasted to decrease to approximately $75 million for the year, with strategies in place to mitigate future tariff effects.

Additional News

Pentair recently announced the appointment of Lance Bonner as Executive Vice President, General Counsel, and Secretary, effective July 17, 2025. This strategic C-Level change aims to strengthen the company's leadership team as it navigates market challenges. Additionally, Pentair declared a quarterly cash dividend of $0.25 per share, marking the 49th consecutive year of increased dividends. This consistent dividend policy underscores Pentair's commitment to shareholder returns. Furthermore, Pentair announced plans to attend the J.P. Morgan Industrials Conference on March 11, 2025, showcasing its industry presence and strategic initiatives.