Watts Water Technologies 2025 Q1 Earnings Modest Net Income Increase by 1.9%
Daily EarningsFriday, May 9, 2025 1:08 am ET
57min readWatts Water Technologies (WTS) reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company experienced a decrease in revenue, yet saw a slight increase in earnings per share (EPS). Despite the revenue decline, the results were reportedly in line with expectations. The company maintained its guidance for the full year 2025, indicating confidence in achieving its organic sales growth and adjusted operating margin targets amid ongoing macroeconomic uncertainties. This consistent outlook reflects a stable financial performance and strategic operational management.
Revenue
Earnings/Net Income
Watts Water Technologies's EPS rose 1.8% to $2.21 in 2025 Q1 from $2.17 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $74 million in 2025 Q1, marking 1.9% growth from $72.60 million in 2024 Q1. The Company has sustained profitability for 14 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS growth reflects stable financial performance.
Price Action
Post-Earnings Price Action Review
The strategy of purchasing (WTS) shares following its revenue increase quarter-over-quarter and holding them for 30 days has historically yielded substantial returns over the past five years. This approach generated an overall return of 199.74%, significantly outperforming the benchmark return of 92.56% by 107.18%. Despite experiencing a maximum drawdown of -39.53%, the strategy has demonstrated a reasonable Sharpe ratio of 0.88, indicating good risk-adjusted returns. The consistent execution of this strategy reflects a well-managed and responsive investment approach, allowing investors to capitalize on the company's revenue growth and market opportunities. This performance underscores the company's resilience in navigating market fluctuations and leveraging revenue growth to achieve superior returns for its shareholders.
CEO Commentary
Robert J. Pagano Jr., Chief Executive Officer, expressed that Watts Water Technologies had a solid start to 2025, with first-quarter results exceeding expectations, achieving record adjusted operating income, margin, and EPS. He acknowledged the dedication of employees in navigating a challenging environment and highlighted a proactive response to the dynamic trade conditions by leveraging global sourcing, driving productivity, and implementing pricing actions. Pagano emphasized the company's strategic vertical integration as a competitive advantage, citing confidence in their ability to manage inflation and supply chain challenges while maintaining commitments to stakeholders.
Guidance
The company maintains its full-year 2025 outlook for organic sales growth and adjusted operating margin amid macroeconomic uncertainty. Pagano reiterated confidence in their strong balance sheet and solid cash flow generation, which will support capital allocation priorities and the creation of sustainable long-term value.
Additional News
In recent non-earnings related news, Watts Water Technologies announced a 21% increase in its quarterly dividend, raising it from $0.43 to $0.52 per share, effective June 2025. This decision underscores the company's commitment to returning value to shareholders and reflects its robust financial position. Additionally, the company repurchased approximately 19,000 shares of Class A common stock at a cost of $3.9 million during the first quarter of 2025. This repurchase is part of an ongoing stock buyback program, which still has approximately $141 million available under the authorization made in 2023. These strategic moves highlight Watts Water Technologies' focus on enhancing shareholder value through disciplined capital allocation.
Revenue
Earnings/Net Income
Watts Water Technologies's EPS rose 1.8% to $2.21 in 2025 Q1 from $2.17 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $74 million in 2025 Q1, marking 1.9% growth from $72.60 million in 2024 Q1. The Company has sustained profitability for 14 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS growth reflects stable financial performance.
Price Action
Post-Earnings Price Action Review
The strategy of purchasing (WTS) shares following its revenue increase quarter-over-quarter and holding them for 30 days has historically yielded substantial returns over the past five years. This approach generated an overall return of 199.74%, significantly outperforming the benchmark return of 92.56% by 107.18%. Despite experiencing a maximum drawdown of -39.53%, the strategy has demonstrated a reasonable Sharpe ratio of 0.88, indicating good risk-adjusted returns. The consistent execution of this strategy reflects a well-managed and responsive investment approach, allowing investors to capitalize on the company's revenue growth and market opportunities. This performance underscores the company's resilience in navigating market fluctuations and leveraging revenue growth to achieve superior returns for its shareholders.
CEO Commentary
Robert J. Pagano Jr., Chief Executive Officer, expressed that Watts Water Technologies had a solid start to 2025, with first-quarter results exceeding expectations, achieving record adjusted operating income, margin, and EPS. He acknowledged the dedication of employees in navigating a challenging environment and highlighted a proactive response to the dynamic trade conditions by leveraging global sourcing, driving productivity, and implementing pricing actions. Pagano emphasized the company's strategic vertical integration as a competitive advantage, citing confidence in their ability to manage inflation and supply chain challenges while maintaining commitments to stakeholders.
Guidance
The company maintains its full-year 2025 outlook for organic sales growth and adjusted operating margin amid macroeconomic uncertainty. Pagano reiterated confidence in their strong balance sheet and solid cash flow generation, which will support capital allocation priorities and the creation of sustainable long-term value.
Additional News
In recent non-earnings related news, Watts Water Technologies announced a 21% increase in its quarterly dividend, raising it from $0.43 to $0.52 per share, effective June 2025. This decision underscores the company's commitment to returning value to shareholders and reflects its robust financial position. Additionally, the company repurchased approximately 19,000 shares of Class A common stock at a cost of $3.9 million during the first quarter of 2025. This repurchase is part of an ongoing stock buyback program, which still has approximately $141 million available under the authorization made in 2023. These strategic moves highlight Watts Water Technologies' focus on enhancing shareholder value through disciplined capital allocation.
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