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Fortive Corporation  (NYSE:FTV)
Q4 2018 Earnings Conference Call
Feb. 07, 2019, 5:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

My name is Ian and I will be your conference facilitator this afternoon. At this time I would like to welcome everyone to the Fortive Corporation's Fourth Quarter 2018 Earning Results Conference Call. (Operator Instructions) I would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. Mr. Whitney, you may begin your conference.

Griffin Whitney -- Vice President of Investor Relations

Thank you, Ian. Good afternoon, everyone, and thank you for joining us on the call. With us today are Jim Lico, our President and Chief Executive Officer; and Chuck McLaughlin, our Senior Vice President and Chief Financial Officer. We present certain non-GAAP financial measures on today's call. Information required by SEC Regulation G relating to these non-GAAP financial measures are available on the Investors section of our website www.fortive.com under the heading Financial Information. A replay of the webcast will be archived on the Investors section of our website later today under the heading Events & Presentations and will remain archived until our next quarterly call.

A replay of the conference call will be available shortly after the conclusion of this call until Friday, February 22, 2019. Instructions for accessing this replay are included in our fourth quarter 2018 earnings press release.

We completed the divestiture of the Automation & Specialty business in the fourth quarter on October 1, 2018, and accordingly have included the results of the A&S business as discontinued operations for current and historical periods. The results presented on this call are based on continuing operations.

During the presentation we will describe certain of the more significant factors that impacted year-over-year performance. All references to period-to-period increases or decreases and financial metrics are year-over-year on a continuing operations basis.

During the call we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate, will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2017 and subsequent quarterly reports on Form 10-Q. These forward-looking statements speak only as of the day that they are made and we do not assume any obligation to update any forward-looking statements.

With that, I'd like to turn the call over to Jim.

Jim Lico -- President and Chief Executive Officer

Thanks, Griffin, and good afternoon, everyone. Our performance in the fourth quarter provided a strong finish to 2018, capping off another transformational year for Fortive. Looking at the full year, we generated adjusted earnings per share of $3.06 on a continuing operations basis, a 25% increase year-over-year, driven by 4.1% core revenue growth and 35 basis points of core operating margin expansion. The strong top line performance of our core portfolio reflected solid execution against a range of ongoing growth initiatives as we drove product innovation and invested in our market-leading brands in order to continue to enhance our competitive advantage, take market share and position Fortive for sustained outperformance over the long term.

Over the course of 2018, our team significantly accelerated the portfolio transformation process that we have pursued since our spin. During the year we announced several strategically significant transactions, including the acquisitions of Gordian and Accruent, the divestiture of the A&S business to Altra and the pending acquisition of Johnson & Johnson's Advanced Sterilization Products business. These transactions greatly advanced our stated strategy to reposition the portfolio in higher growth, less cyclical markets.

Taken together, the total acquisitions announced since the spin represent $1.7 billion in total revenue on an annualized basis, growing at a high single-digit rate. These acquisitions which average 70% recurring revenue greatly enhanced the recurring revenue profile of the Fortive portfolio. The acquisitions of Gordian and Accruent advanced the execution of Fortive's digital strategy, which is focused on addressing a range of critical software-enabled workflows for our customers. Both Gordian and Accruent are off to a good start, demonstrating strong growth momentum through the end of the year.

Turning to ASP, we made significant progress during the fourth quarter employing the Fortive business system to prepare for a successful transition of the business to the Fortive family. Consistent with what Johnson & Johnson recently announced, we now expect to close the transaction late in the first quarter or early in the second quarter of 2019. We're very excited about the contribution ASP will make once it's integrated into Fortive and we look forward to discussing the Company and the opportunities ahead when the transaction closes.

With that, I'd like to turn to the details of the quarter. Adjusted net earnings were $325.1 million, up 30% over the prior year and adjusted diluted net earnings per share were $0.91. Sales grew 11.4% to $1.8 billion, reflecting a core revenue increase of 7.4%. All platforms posted core revenue growth, highlighted by Transportation Technologies, Product Realization and Sensing Technologies, as well as very strong performance in Fluke and Industrial Scientific.

Acquisitions, including Gordian and Accruent, contributed 580 basis points to top line growth while unfavorable foreign exchange rates reduced growth by 180 basis points. Geographically, high-growth markets core revenue grew high single-digits with continued strength in Asia and Latin America. This growth was led by Gilbarco Veeder-Root, Tektronix and Fluke.

China in particular posted a strong quarter with low double-digit growth. While we remain cautious about certain parts of the China market, we are pleased with the continued outperformance in the fourth quarter and our strengthening competitive position. Developed markets' core revenue grew high single-digits, reflecting continued strength in North America. Core revenue growth in North America was high single-digits, led by strong performances at GVR, Fluke, EMC and Industrial Scientific. Western Europe grew low single-digits, led by high single-digit growth at GVR and Sensing Technologies and mid-single digit growth at Tektronix.

In the fourth quarter we posted a gross margin of 51.1%, our fifth consecutive quarter of gross margins at or above 50%. Pricing accelerated to 80 basis points with four platforms delivering positive price during the quarter. Operating profit margin was 16. 8% with core operating margins increasing 40 basis points as strong PPV and productivity were partially offset by the dilutive impact of tariffs and unfavorable mix during the quarter.

During the fourth quarter we generated $387 million of free cash flow, representing a seasonally strong conversion ratio of 166%. We generated free cash flow for the full year of $1.1 billion, an increase of $180 million or 20% on a year-on-year basis. We were also pleased to see our annual free cash flow conversion increase to 120%, an 800 basis points increase from the prior year.

Turning to our segments; Professional Instrumentation posted sales growth of 14%, including core revenue growth of 5.2%. Acquisitions contributed 1,020 basis points while unfavorable foreign exchange rates reduced growth by 140 basis points. Reported operating margin of 16.1% reflected 545 basis points of dilutive operating margin associated with acquisitions and transaction expenses. Core margins were flat, reflecting the dilutive impact of tariffs at Fluke and Tektronix, and some one-time warranty-related expenses in the quarter.

Advanced Instrumentation and Solutions core revenue increased mid single-digits during the quarter, driven by continued outperformance at Fluke and I&C and strong growth at Tektronix. Field Solutions core revenue grew low single-digits, highlighted by mid single-digit growth in developed markets, including strong performance for Fluke and ISC in North America. This growth was partially offset by a slight decline in high-growth markets due to continued weakness at Qualitrol. China, however, posted a strong quarter with low double-digit core growth.

Fluke delivered mid single-digit core growth led by mid-teens growth at Fluke Calibration and mid single-digit growth at Fluke Industrial. Fluke had a strong finish to the year in China, highlighted by the increasing momentum behind Fluke's e-commerce efforts which saw strong point-of-sale increases and continued share gains for its handheld products. Fluke Health Solutions saw strong contribution from Landauer, which performed ahead of our expectations in its first full year within Fortive.

The team leveraged FBS both commercially and in the factory, finishing with mid single-digit growth and 270 basis points of gross margin expansion for the year and positioning the business to deliver strong returns in 2019 and beyond. We're excited about the progress we continue to see at Fluke Digital Systems. The eMaint CMMS offering continues to delivered strong growth, up greater than 20% for the quarter and full year. Fluke's innovative sensor offerings were a key element of its digital strategy and continued to generate strong positive response from customers, including the Fluke 3561 Vibration Sensor which was recently named a 2018 breakthrough product by Processing Magazine.

Industrial Scientific delivered low double-digit growth, led by North America and Asia. iNet saw greater than 20% growth for the quarter while rental revenue increased high single-digits. During the quarter, ISC completed the transition of the iNet offering to a fully cloud-based solution, enabling the delivery of better speed and uptime to our customers. ISC's commitment to FBS continues to yield strong operational improvements, including a significant decrease in working capital and a related increase in free cash flow over the course of the year.

Qualitrol's core revenue declined high-teens during the quarter, in line with our expectations, reflecting continued softness across its core geographic markets. We continue to expect the soft market conditions that challenge Qualitrol throughout the year to remain a headwind well into 2019.

Product Realization core revenue increased high single-digits for the quarter, led by high single-digit growth at Tektronix and mid-teens growth at EMC. EMC posted a record quarter for revenue as it delivered against the backlog that carried into the quarter, including the volume that had been subject to customer-related delays as mentioned last quarter. Given strong order flow, EMC finished the year with record backlog, setting up well for continued growth in 2019.

Growth at Tektronix was broad-based across both developed and high-growth markets. Developed markets saw mid single-digit growth driven by Japan, North America and Western Europe. We're pleased to see another quarter of double-digit growth for Tek in China, driven by strong performance at (inaudible). Tek continues to benefit from momentum it has generated from its targeted higher growth end markets. New product introductions remain a key driver of Tek's growth, reflecting the continued momentum behind the 5 and 6 Series oscilloscopes, which saw key customer wins in both the automotive and power end markets during the quarter.

Our Sensing Technologies platform increased high single-digits in the quarter. All of the platforms' major regions saw strong growth, including high single-digit growth in Western Europe and mid single-digit growth in North America and China. The strong performance in the quarter was driven by industrial and medical end markets, as well as revenue shifted from the previous quarter due to hurricane-related delays. We are excited about the number of new product initiatives across the sensing platform that launched in the fourth quarter, including the Setra next-generation industrial pressure transducer, the AXD, which is well positioned to gain market share based on superior range of features and functionality.

Moving to our Industrial Technologies segment, revenue grew 8.1%, including core revenue growth of 10.3%. Unfavorable foreign exchange rates reduced growth by 230 basis points. Reported operating margin of 20.5% reflected a core operating margin increase of 95 basis points, driven by the incrementals on the strong volume in the quarter. Our Transportation Technologies platform core revenue grew low double-digits led by greater than 20% growth in high-growth markets and low double-digit growth in developed markets. Gilbarco Veeder-Root delivered mid-teens core revenue growth driven by mid-teens increase in developed markets and a greater than 20% increase in high-growth markets. Developed markets were led by North America, reflecting strong EMV sales.

As expected, Gilbarco continued to see an acceleration in EMV sales including a major customer win at Murphy's USA and the continued strength of our programs with Shell and Chevron. China saw mid-teens core growth driven by continued demand at Veeder-Root for submersible pumps and automatic tank gauges related to ongoing double-walled tank upgrades. GVR's performance in high-growth markets also included significant growth in India as synergies from the combined Gilbarco and Orpak product offering continued to drive share gains to enhance GVR's strong position in that market. Orpak continues to perform well globally, exceeding expectations and generating greater than 50% of revenue from software to enhance GVR's recurring revenue profile.

TeletracNavman declined low single-digits as low double-digit core growth in Asia Pacific was more than offset by high-teens decline in North America. TeletracNavman continues to perform well in Asia Pacific with the fourth quarter represented the 11th quarter out of 12 with double-digit core revenue growth. In North America we have continued to experience a high level of customer churn, which remains a headwind for the business in 2019.

Moving to Franchise Distribution, the platform grew core revenue low single- digits. Matco delivered low single-digit growth reflecting strong performance from diagnostic and specialty tools. Tool storage grew low single-digits during the fourth quarter and we are pleased with how that category performed over the second half of 2018, particularly within our premium tool storage product line. Matco's Maximus 3. 0 diagnostic scan tool platform continues to perform well, driving improving growth in diagnostics category and accelerating recurring revenue opportunities from the sale of MaximusFix, Matco's proprietary subscription-based automotive repair database. The Max 3 is expected to be a consistent growth driver in the coming quarters as Matco continues to roll out additional features and enhancements in the platform.

To wrap up, we ended the year with a significantly enhanced portfolio with exposure to better end markets, tied to attractive secular drivers, reduced cyclicality, a growing share of recurring revenue and consistently robust free cash flow. This enhanced portfolio has us well positioned to continue to drive organic growth and innovation while also deploying our growing free cash flow into acquisitions that will accelerate our strategy and enhance our long-term competitive advantage.

Alongside this portfolio of transformation, we continue to generate strong core operating results, consistent with the Fortive formula, driving full year adjusted earnings growth of 25% and increasing free cash flow conversion to 120%. This year once again demonstrated the power of the Fortive business system, enabling our team to execute a series of complex capital allocation strategies to transform our portfolio while driving innovation to better meet our customer needs and delivering sustained top quartile earnings growth for our shareholders.

Turning to the guide, we are initiating our full-year 2019 adjusted diluted net EPS guidance of $3.40 to $3.50, representing year-over-year growth of 11% to 14% on a continuing operations basis. This does not include any contribution from the pending acquisition of ASP. The guide also assumes 3% to 5% core revenue growth, core operating margin expansion of 50 basis points, an effective tax rate of 17% and free cash flow conversion ratio of greater than 120% for the year.

The adjusted diluted net EPS guidance also reflects the dilutive impact from the mandatory convertible preferred stock on an if-converted basis. The fundamentals across our enhanced portfolio remain strong and we once again expect to outperform and deliver sustainable double-digit adjusted earnings growth in the year ahead. We are also initiating our first quarter adjusted diluted net EPS guidance of $0.64 to $0.68 which includes an assumption of 3% to 4% core revenue growth, core operating margin expansion of 25 to 50 basis points and an effective tax rate of 17%.

In closing, I'd like to extend my personal thanks and appreciation to our Fortive teammates across the world for their continued dedication to our shared purpose of delivering essential technology for the people who accelerate progress. It is the commitment of our team which provides the foundation for our enduring culture of continuous improvement and it enables us to consistently deliver value for our customers and top quartile returns for our shareholders.

With that, I'd like to turn it over to Griffin.

Griffin Whitney -- Vice President of Investor Relations

Thanks, Jim. Before we move into questions, I'd like to take this opportunity to announce that Fortive will host its Annual Investor and Analyst Day on May 16, 2019 in New York City. Further details will be circulated soon.

That concludes our formal comments. Ian, we are now ready for questions.

Questions and Answers:

Operator

(Operator Instructions) Our first question is from the line of Scott Davis from Melius Research.

Scott Davis -- Melius Research -- Analyst

Hi, good afternoon guys.

Jim Lico -- President and Chief Executive Officer

Hi, Scott. How're you?

Scott Davis -- Melius Research -- Analyst

Good; I'm good. I wanted to reconcile a little bit, I know you don't have all the answers in the world, none of us do on China, but you said cautious on China but all your numbers looked really pretty strong across the board. Is there anything in your forward order book or anything more tangible other than what we all read in the newspaper?

Jim Lico -- President and Chief Executive Officer

Well, I think there's a couple of things, Scott. One, yes, you're right, we had another very strong year of performance in China. We finished strong. I suspect some of that had to do with maybe a little bit of business that maybe got pulled in as people were maybe avoiding price increases and stuff. But on balance, a very strong fourth quarter for China as you identified. I think we are basing this on a couple of things. One, we're going to sunset some slower like the double-walled tank upgrades at Gilbarco as an example, that's going to slow down a little bit in the back half of the year.

So that's one thing that we kind of know. We certainly thing that we've seen some -- we believe there will be some slowing of some of the business at Tektronix and we've seen that a little bit in the order book, still good growth, mid single-digit growth, but probably a little slowing up in double-digit that we've been in. So those are couple of examples. We continue to believe we're outperforming and certainly it's early days.

You've heard me say this a few times that January and February don't tell you a lot in China. You really have to get to March before you have a sense for that. And so, I think we'll -- as we turn the corner in the first quarter we'll have a better sense of if that number has some upside to it.

Scott Davis -- Melius Research -- Analyst

Okay. Fair enough. And then, I'm not normally nitpicky like this but I'll say it anyways. So your 50 basis point margin guide, I mean you lost about 50 bps in a year to acquisitions I think on a gross margin line at least and I would think getting those businesses kind of back to some sort of level of fully integrated and normal could be a nice tailwind. I guess what I'm asking is, how much of that 50 bps is fixing what you bought versus what you're going to get naturally out of your 4% core revenue growth midpoint number?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So the 50 bps for the year, we've always got things that happened during the year, in every year. So there's got some pluses and minuses. And so, yes, we will fix some of those things at the end of the year and they won't repeat. There could be other things that come in, but we might have upside to that number for the year. But we are having to overcome the impacts of tariffs. And while we've offset than at the EPS level, when you take price to offset the tariffs that falls through at zero OMX, zero OP. So it gives you a little bit of an optical headwind there.

Operator

And our next question is from the line of Julian Mitchell from Barclays.

Julian Mitchell -- Barclays -- Analyst

Hi, good evening. Just a first question maybe on the first quarter guidance. So you have core growth guided pretty similar for Q1 as for the year. EPS though is starting out kind of flattish year-on-year with the total year up low double-digit. So maybe should help us understand the bridge there. Is it all about a lot of FX headwind in the quarter? And then the margins, it's the tariff issue and some cost inflation? Maybe just any color on that.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, thanks, Julian. A couple of things. As you noted, there's FX. We've got $0.04 of FX headwind in the year. Half of that is sitting in Q1. So there's a couple of pennies there. Tax rate is up year-over-year. We had at 17%, still really good. Those are probably three big things we've called. And while I think we're guiding nominally lower in Q1 at 3% to 4% rather than 3% to 5% for the year and that's reflecting maybe a little stronger finish in Q4. I think those are the main puts and takes there.

Julian Mitchell -- Barclays -- Analyst

Understood. Thanks. And then my second question, when we're thinking about professional instruments specifically, what kind of core incremental margins should we expect for 2019 in terms of expansion? And maybe how quickly do we see that? Or do you anticipate Q1, you still have a bunch of these maybe warranty issues and inflation to get over it? I guess I'm trying to how back-end loaded you think the core margin expansion is at PI this year?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So the warranty impact is a one-time that we booked in Q4 and so that's not going to be a drag going forward. Normally I think we would expect probably 30% to 40% in ECM's (ph) incremental falling through in the quarter and the year. Just on the back-end loaded, I think we're pretty level loaded after Q1.

Julian Mitchell -- Barclays -- Analyst

Great, thank you.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Thanks, Julian.

Operator

And our next question is from the line of Steve Tusa from JP Morgan.

Steve Tusa -- JP Morgan -- Analyst

Hi, good evening, good afternoon, wherever you are. The -- you mentioned price offsetting tariffs. What is the level of price you have embedded in that 3% to 5%?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Probably I -- well, we did 80 bps of price in Q4 and now we expect it to trend up from there as it has done all year. It might probably get all the way to 100 bps, 1%.

Steve Tusa -- JP Morgan -- Analyst

Okay. And then on GVR for the year, what are you assuming for growth in GVR and how much of that is a function of, I guess, you mentioned there was the other regulation dropping off, but obviously the EMV stuff is rolling in here. So maybe just talk about how fast GVR can grow and then what you're expecting on kind of headwinds and tailwinds from these various regulatory drivers.

Jim Lico -- President and Chief Executive Officer

Yes, so Steve, it's Jim. So I think we're sort of looking at mid single-digit at Gilbarco right now for the year. They finished stronger than we expected. So some of that origin in the fourth quarter was certainly Gilbarco with double-digit growth in the quarter. So we think they're going to continue to be strong through the year. And while the double-wall had some impact on our overall China number, in the bigger business that we have at Gilbarco it's not going to be a tremendous headwind. So they've continued to do well in other high-growth markets like India. So we think on balance their high-growth business will be pretty good this year.

Those markets are a little lumpy, so it can move around from quarter-to-quarter but we think the high-growth markets for Gilbarco will be good this year. And then back to EMV, we feel -- we saw good business, we saw strength and customers clearly are starting to think about the trends going forward and some of the things that they need to do to be in compliance by the end of 2020. So I think as we said in July, I think Gilbarco played out slightly stronger than we thought where we were when we were in July.

Steve Tusa -- JP Morgan -- Analyst

Why wouldn't Gilbarco be better than mid singles then if that's the case? Don't you have really easy comps here in the first half of the year? I mean or you're just being conservative on this front?

Jim Lico -- President and Chief Executive Officer

I think like anything else we -- the year there's certainly probably potential upside but I think at the end of the day we did finish very strong. So the fourth quarter does impact the full year number. It will probably be a little bit better in the first half than that number and then -- but then obviously we're going to have a really tough comp off the double-digit number that they have just posted in the fourth quarter. So, yes, we'll probably -- you'll probably see some higher growth rates probably as an example in the first quarter. If you remember, we had some ERP issues last year in the first quarter. So we will see probably higher than that mid single-digit number in the first quarter for sure.

Steve Tusa -- JP Morgan -- Analyst

Okay, cool. Thanks a lot.

All right. Thanks, Steve.

Operator

And our next question is from the line of Andy Kaplowitz from Citi.

Andy Kaplowitz -- Citi -- Analyst

Hi, good afternoon guys.

Jim Lico -- President and Chief Executive Officer

Hi, Andy. How're you?

Andy Kaplowitz -- Citi -- Analyst

Good. How're you? Jim, could you talk about Western Europe actually? I mean it was up low single-digits which is better than last quarter. I think you were down low single-digits. And as you know there are concerns about growth over there. So what actually improved in the quarter and what's embedded in your growth forecast for 2019 in that region?

Jim Lico -- President and Chief Executive Officer

Andy, you're talking about Western Europe, right?

Andy Kaplowitz -- Citi -- Analyst

Yes, correct.

Jim Lico -- President and Chief Executive Officer

Yes, so we were a little better, still low single-digit in the quarter, in the fourth, Andy. So that came in around where we thought it was going to come in and we've been a little down I think in the third quarter. So even though the fourth quarter was a little better than the third, we still think Europe is probably low to low single kind of environment, maybe touches mid-single, but I think we still are conservative on the European forecast right now based on a lot of the things we've seen and we all know about and just things we've seen as an example on a point of sale. We had one of the drivers in the quarter was Gilbarco. We've had a pretty good mid single-digit quarter in the fourth and we don't expect necessarily that to continue through in Europe for the whole year of 2019. So I think a low single-digit kind of view of Western Europe is kind of where we're at right now.

Andy Kaplowitz -- Citi -- Analyst

Thanks. I got you. And then I was intrigued by your comments in China to the extent that you said that your competitive position continues to strengthen there. So maybe you could elaborate on that a bit. I think you mentioned e-commerce at Fluke, obviously you're doing well in GVR. So could you materially beat it in terms of market share in 2019 and as you go forward versus the market in China?

Jim Lico -- President and Chief Executive Officer

Yes. I think the Fluke performance in the quarter was very good and obviously we've got a long history there of building products for that market, building and having both production and design capability over there to really build product -- really be China for the China market. And so I think we just continue to build the business. Ironically -- and I think a great example of our benchmark, a lot of e-commerce efforts that we've put in over there really came from Tektronix and they started that. So I think it's a great example of learning from each other in those businesses.

So I think certainly we have pretty good sense that we're doing pretty well in the places you just mentioned. And our Tek performance is good. It's always hard to gauge against others there from a share position. Things kind of move around, but I think we'll now have three years in a row of double-digit growth in China. So those numbers feel pretty good. So those are our three biggest businesses and that's the basis for kind of our belief that we're outperforming, if you will, and I think we can continue to outperform as well.

Andy Kaplowitz -- Citi -- Analyst

And you're thinking mid single-digit growth for China in 2019 based on what...

Jim Lico -- President and Chief Executive Officer

That's right. That's where we're at right now. I think as I mentioned before, having been in China a lot over the course of 20 years, January and February don't -- because of the Chinese New Year, don't give you a lot of color. You really got to get into March. So our best view right now with what we've seen from a point of sale perspective and what customers are telling us is mid single-digit.

Andy Kaplowitz -- Citi -- Analyst

I understand.

Jim Lico -- President and Chief Executive Officer

Thanks, Andy.

Operator

And our next question is from the line of Jeffrey Sprague from Vertical Research.

Jeffrey Sprague -- Vertical Research -- Analyst

Thank you. Good afternoon, everyone.

Jim Lico -- President and Chief Executive Officer

Hi, Jeff.

Jeffrey Sprague -- Vertical Research -- Analyst

How's it going? Just two things from me. Just first on J&J, you know, it closed maybe a little bit later than you hoped, but relative to your expectation should we still be thinking about kind of roughly $0.30 on an annualized full year run-rate basis for the first full year of ownership?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, I think nothing's changed from the first four quarters moving forward. I think that's -- I think we said $0.30 to $0.35 last quarter and nothing's changed from that.

Jeffrey Sprague -- Vertical Research -- Analyst

Okay great. And with respect to the EMV question maybe a little bit to Steve's point. I just thought '19 would be a little bit stronger too to avoid maybe kind of a big fire drill in 2020 on the compliance deadline. Do you see situation lining up where 2020 is kind of a big scramble? Or do you expect kind of a smooth acceleration into that compliance deadline?

Jim Lico -- President and Chief Executive Officer

I think what we've seen -- first of all, we had a stronger finish in 2018. So that has some as I mentioned before. So we still think '19 with the numbers we're seeing in EMV. They're going to be good numbers. Jeff, I think at this point we're starting to think more the other way, is that things are going to move and stretch into 2021 a little bit more. So, no one's got a perfect crystal ball here right now, but as we talk to folks we think people are going to make decisions based on their liabilities as some of the larger customers are looking at where they've had liabilities thus far and we'll make some intelligent decisions about their upgrades based on that. So our crystal ball right now probably says things are continuing to be good, but they probably push into 2021 right now.

Jeffrey Sprague -- Vertical Research -- Analyst

All right. Thank you.

Jim Lico -- President and Chief Executive Officer

Thank you.

Operator

And our next question is from the line of John Inch from Gordon Haskett.

John Inch -- Gordon Haskett -- Analyst

Hi everybody.

Jim Lico -- President and Chief Executive Officer

Hi, John.

John Inch -- Gordon Haskett -- Analyst

Hi guys. I think, Jim, you said Tek in China was going to go from double-digit to mid-single in 2019. What -- based on the guidance, what actually happens to Fluke and Tek based on your guidance in 2019 and what did they do in 2018 if you could just remind us, core growth?

Jim Lico -- President and Chief Executive Officer

You mean for China?

John Inch -- Gordon Haskett -- Analyst

No, I was giving you the China data point. I didn't hear what you -- if you'd said anything about Tek overall. So just what's the Fluke and Tek done in 2018 versus 2019 core growth roughly based on your assumptions?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, I think Fluke's mid-single '18; mid-single '19. Tek is mid-single. I think they had a stronger finish in '18. So I think that got them to mid-single and they're probably closer to low single -- low to mid in 2019. So, hopefully that's helpful.

John Inch -- Gordon Haskett -- Analyst

Yes; no, that makes sense. The 3% to 5% guide, what about the deals that we've done? Like how much of the recently acquired acquisitions, how much did they contribute in the collective to the 3% to 5%? I think we said -- Tek you said pricing 3%, what about the other businesses that you've done recently?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So the only thing, that 3% to 5% is a core growth so that only includes Landauer and ISC and Orpak. I think I calculated it, that was like 30 basis points. The more recent ones, they won't turn core until the fourth quarter of next year.

John Inch -- Gordon Haskett -- Analyst

Okay. So still pretty small, all right?

Jim Lico -- President and Chief Executive Officer

Yes.

John Inch -- Gordon Haskett -- Analyst

And then, Jim, if you were to not read the newspapers but simply just think about your businesses, what are you most concerned about in 2019? So again, not macro stuff because we're all sort of concerned about that, but just if you think about the businesses having lined up, what are you -- where you want to apply the most pressure as the CEO on an operations basis? Where do you feel like you've got to focus the most attention if there's an issue at all in 2019?

Jim Lico -- President and Chief Executive Officer

Yes, it's a great question and probably I could give you -- I could go for a half hour on it. But I would say as we think about -- maybe start with how we think about risk. Certainly we're -- I think it's impossible not only reading the paper, but also seeing in our own business and I mentioned this before. Western Europe continues to be a watchful eye. It's not our biggest geography, but certainly some of the things we've seen out in Germany as an example would have us watching out to make sure that we're prudent in what we're doing over there. China could go up or down. It's probably a risk and an opportunity, regionally.

I think operationally, as we think about it from a business perspective, we certainly want to make sure we take advantage of the opportunities that are in front of us relative to GVR and the EMV opportunity. We mentioned in the prepared remarks, as an example, the Murphy's USA order that we got, that was a big win for. We want to continue to have those big wins and continue to convert those into revenue opportunities and increase our installed base over time. So I would say GVR. And then more broadly, John, we're always working to accelerate innovation. We've put a big effort into digital analytics and IoT in a number of our businesses.

You've heard us talk about some of those successes like Fluke Digital. Certainly, Gordian and Accruent, we're learning a lot from them as well how to accelerate some things. So that's probably all -- we're going to have leadership conference here in a few weeks and those will be the numbers of the things we're going to be talking about and focused on as we talk to our top leaders in the business.

Operator

And our next question is from the line of Richard Eastman from Baird.

Richard Eastman -- Baird -- Analyst

Hi, good afternoon, Jim and Chuck. Could we just -- can you just give us kind of a quick update on Gordian and Accruent? Just trying to get kind of year-over-year growth rates there. I mean even though they're not core, I'm just curious, are they pacing out of the growth that you expected and just kind of what the demand and order rate look like?

Jim Lico -- President and Chief Executive Officer

Yes, I think we had a high single-digit growth rate in for Accruent last year and we delivered ahead of where we thought we'd be although as we said only a few months of our own ownership. So we won't take any credit there. Gordian, probably a little bit better from a growth rate, more closer to double-digits. So -- and again, they did a nice job as well. So we -- so far they've gotten out of the gate well. We were with the Accruent team a few weeks ago for their 100-day strategic plan and the energy and enthusiasm about what they can do and what we can do together is still I think is really makes for -- I think both are going to be -- it's going to be great businesses for us going forward.

I think you'll start to see those growth rates I just mentioned are probably the growth rates for 2019 as we look at things and -- but we'll continue to look. We're certainly looking as we finish their 100-day strategic plans, Rick, as you know because you know as well, we will look for opportunities to invest into more growth opportunities to accelerate some of those growth rates and those things because of the softer nature of the business, some of those probably won't start to really take an impact until the latter half of 2019 and into '20.

Richard Eastman -- Baird -- Analyst

And do you spend any time at all trying to look and correlate the ABI with Gordian's demand?

Jim Lico -- President and Chief Executive Officer

Say a little bit more than that. Correlate the demand with?

Richard Eastman -- Baird -- Analyst

With the ABI index, construction...

Jim Lico -- President and Chief Executive Officer

Yes.

Richard Eastman -- Baird -- Analyst

There's a lot of concern around that but...

Jim Lico -- President and Chief Executive Officer

Right. Sorry, I didn't hear the A part of that. No, we haven't found a lot of correlation there yet. I think because it's in their case it's such an underpenetrated market that what's actually happening from projects versus just the ability to grow the business just by increasing the penetration of their offering. It's such an opportunity that it doesn't necessarily correlate as well as one might think.

Richard Eastman -- Baird -- Analyst

Yes, fair enough. And just last question around the PI Sensing businesses, it's kind of maybe your fourth largest maybe set of businesses and one would think there's some cyclical sensitivity to those businesses around automation perhaps around China. But they finished the year strong. Is there anything in the order rate that might give you pause in that -- in those kinds of sets of businesses Gems and...

Jim Lico -- President and Chief Executive Officer

They're likely to decel a little bit in 2019. So they were most -- as a platform they were stronger mid single-digit grower. And in 2019 they might slow a little bit, low to mid-single. So I think it's still early to tell but there's will be a little bit of slowing that's possible. But I think we still see a lot of opportunities. We mentioned in the prepared remarks that in sensors we had some nice introductions in technology. We've also seen -- we've taken the businesses into what I would call may be a little bit less cyclical markets like food and beverage and some critical environment applications. So I think the teams have done a really nice job of trying to reposition the businesses into verticals that maybe are less cyclical markets like some of them that you just mentioned.

Richard Eastman -- Baird -- Analyst

Okay. Very good. Thank you.

Jim Lico -- President and Chief Executive Officer

Thank you, Rick.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Thanks, Rick.

Operator

And our next question is from the line of Deane Dray from RBC Capital Markets.

Deane Dray -- RBC Capital Markets -- Analyst

Hi, thanks, good afternoon everyone.

Jim Lico -- President and Chief Executive Officer

Hi, Deane.

Deane Dray -- RBC Capital Markets -- Analyst

I'd like to stick with Accruent and Gordian if we could. And could you remind us of their deferred revenue profiles and what the cash flow contribution, the free cash flow contribution were this quarter?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So, Deane, I think if you're comparing to maybe some other companies about big prepayment and getting in deferred revenue, that's really not how they're set up inside. I don't think that there's much there and especially moving the needle on free cash flow.

Deane Dray -- RBC Capital Markets -- Analyst

Just if you give us a profile of what new expect even if it's not 100%, but what was the free cash flow profile, free cash flow yield for the businesses be?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

I think it will be similar to what the rest of Fortive would be. I think that it's going to have great margins, but as that free cash flow percentage of earnings I think if you look at it around the 120% that the rest of the Company is, I think that will be great. But when you get that deferred revenue, you can sometimes see it jump up beyond there.

Deane Dray -- RBC Capital Markets -- Analyst

Good. And just still on these two, when you acquired them you referenced some significant adjacencies for more M&A in this space and how you're feeling about that and does it make sense to have them in the Field Solutions piece and might you be breaking these out at some point?

Jim Lico -- President and Chief Executive Officer

I wouldn't necessarily speculate on breaking it out at any point in time. I certainly think they fit the mandate of what Wes is trying to do within the platform at this point in time. Relative to M&A, yes, we have a solid funnel there. As you can imagine, both of them being private equity backed, they had a funnel already working. Accruent had closed some deals right around the time that we closed the deal, so they had already brought in a couple of businesses that they were working on. So, yes, we like the funnel of both businesses and we're continuing to look for both small and maybe larger opportunities where available to bring into the business. And both management teams have good experience in integrating acquisitions. So not only do we have -- obviously we have the capital to do this, but we've got tje management capacity in both of those businesses to accelerate growth.

Deane Dray -- RBC Capital Markets -- Analyst

Thank you.

Jim Lico -- President and Chief Executive Officer

Thanks, Deane. Have a great day.

Operator

And our next question is from the line of Scott Graham from BMO Capital Markets.

Scott Graham -- BMO Capital Markets -- Analyst

Hi, good evening.

Jim Lico -- President and Chief Executive Officer

Hi, Scott.

Scott Graham -- BMO Capital Markets -- Analyst

I want to kind of ask this same question as Deane, but maybe a little bit different way. Portfolios -- the segments a little bit lopsided right now. Could we be a year from today looking at a three segment portfolio? Does that seem to make more sense?

Jim Lico -- President and Chief Executive Officer

Well, I think that lopsided in terms of what we have on board, I'm not sure I agree with that. But I suspect you're meaning when we get to the other side with ASP. I think once we get that on board we'll take a look and see what makes the most sense. But right now I think we're thinking about ASP coming on and it will become its own platform. And we'll wait till we get to probably till the end of the year before we take up segments.

Scott Graham -- BMO Capital Markets -- Analyst

Okay. Fair enough. Then the follow-up is simply, again, not to beat the horse dead here, but 3% to 5% organic, just -- as I look at what's coming into the organic in '19, the 17 acquisitions and then we have some also faster growth acquisitions coming in late this year into the core, it seems like 3% organic would be something that you can do in your sleep. I'm just wondering what is the -- what gets you down to a 3% at the low end? What are the things that you are concerned about that you would put a (inaudible) particularly if you remember, we talked about this at the Investor Day where GDP, GDP plus I think that there was some thinking about possibly going to numbers and something a little bit higher than GDP. Can you just weigh in on the 3% in particular?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Well, Scott, we agree with you. We're really excited about the businesses that we brought on. The main thing is the Gordian and Accruent and ASP. The Gordian and Accruent will turn into that core number only in the fourth quarter really and ASP won't be in it at all. So a big -- so I think when you get to 2020, I think a fair comment, but that's the main point.

Scott Graham -- BMO Capital Markets -- Analyst

But if you could maybe finish that, Chuck, if you don't mind, the 3%, what are the things out there that get you to the 3%? What would have to happen there?

Jim Lico -- President and Chief Executive Officer

I think -- Scott, it's Jim. I think it would really be two things. One, probably a little bit slower Western Europe and maybe China not coming back in that. We called it mid single-digit. There's a range of numbers within mid single-digit and we're probably on the lower end of that mid-singles. Probably the two things that -- I think North America's solid. You never -- in February I'm never going to call a year that's not necessarily a great thing to do with not having an economics degree, but I think the brutal reality is what you we should be doing. We're doing what we need to be doing from a market environment that looks like a low to mid single-digit growth depending on the business.

And I think if North America's good, Western Europe holds in there, China continues to be pretty good, the rest of the markets are relatively small, then you start to see the high end of that. And if any of those, I think North America is probably the most likely to stay pretty good and the other two weighing would be where you start to get into the lower end of that guidance.

Scott Graham -- BMO Capital Markets -- Analyst

Appreciate that. Thank you.

Jim Lico -- President and Chief Executive Officer

All right. Thanks, Scott.

Operator

And our next question is from the line of Josh Pokrzywinski from Morgan Stanley.

Josh Pokrzywinski -- Morgan Stanley -- Analyst

Hi, good evening guys.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Hi, Josh.

Jim Lico -- President and Chief Executive Officer

Hi, Josh.

Josh Pokrzywinski -- Morgan Stanley -- Analyst

Yes, just to keep on with 1Q, I know just to go back to probably beating the horse pretty dead at this point, but just pulling out the price comment from earlier about the point of price in the first quarter, the comp gets easier, you mentioned GVR feels a little bit better. I guess, Jim, you made a comment about some pull forward maybe in China. Is there anything else that got pulled forward elsewhere as best you can tell? Or anything kind of (inaudible) in the backlog? Otherwise, you would think that having January behind you at this point that it'd be easier to bridge that out?

Jim Lico -- President and Chief Executive Officer

Yes. I think one is we think there's probably about 70 to 100 basis points of growth in the fourth quarter that probably is equated to -- probably was first quarter business. So if you look at our guide, part of that is probably 70 to 100 that had happened. So part of our overage in Q4 is -- and it really comes down to a few things. One, certainly there were some business at Gilbarco that where people looked at year-end money and decided to spend it and wanted to take those orders in revenue in the quarter. That's one place.

EMC had customers and wanted to get content in business and that went out as well. As we mentioned in the prepared remarks, they had their biggest quarter in the history of the company. And then some pull forward of some of the pricing actions that we've got around tariffs that happened at Fluke and Tek. So those things combined equal to about 70 to 100. And so we go in with I think some optimism around North America and China based on how we finished but we also know that some of what we saw was probably business that would have transacted in the first quarter.

Josh Pokrzywinski -- Morgan Stanley -- Analyst

Got it. And then just to stick with that same line of thought, is there anything on the margin side that we should think about in a 4Q to 1Q bridge? I know there's a lot of moving pieces with the deals and obviously with ASP that closes in the quarter, that will move it around further still, but anything sequentially that adds on, drops off kind of beyond a volume input?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

No, I think that's the main thing difference there from Q4 to Q1 especially when you look at what normally happens between these quarters. There's a significant step down, but nothing comes to mind that's abnormal.

Josh Pokrzywinski -- Morgan Stanley -- Analyst

Got it. Thanks.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

And our next question is from the line of John Walsh from Credit Suisse.

John Walsh -- Credit Suisse -- Analyst

Hi, good afternoon.

Jim Lico -- President and Chief Executive Officer

Hi, John.

John Walsh -- Credit Suisse -- Analyst

So a lot of ground covered, but wanted just to get a little more specific. Can you actually give us the ballpark of where EMV revenue ended for 2018 so we just know the jumping off base for that piece of the business?

Jim Lico -- President and Chief Executive Officer

We're about 40% through the cycle, a little over 40% through the cycle as we sunset 2018. So that's about where we thought we'd be, maybe a little bit ahead. But we also see as I mentioned before that we think it extends out farther. So the remaining call it 60%, we'll never go to 100% but the remaining percentage will probably be -- we said -- we've been saying as you know John, 85% roughly by the end of 2020. And we think that number's actually pushing out some of -- I don't want to get too specific because it's a little bit false precision at this point, but we do think that more than four or five points probably is at least pushing into 2021 at this point.

John Walsh -- Credit Suisse -- Analyst

Okay. Thank you. And then maybe just to get after the core growth question a little differently. As we think about Q1 and the full year and I look at your kind of large buckets whether it's Field Solutions, Product Realization, Sensing, right, Transportation, you've already kind of talked about some ranges on where you think the core growth is, but are any of those main platforms negative or down in either Q1 or in the full year construct or is there growth across all those major platforms in both Q1 and for the full year?

Jim Lico -- President and Chief Executive Officer

All the platforms have growth, John. As we mentioned in the prepared remarks, the two places where individual businesses might be negative for a few quarters, one, at Telematics and the other Qualitrol. So those individual businesses. Qualitrol sits in Field Solutions, Telematics in Transportation Tech, but they're obviously not even close to the biggest businesses in those platforms. So the platforms will continue to grow, but those individual businesses are probably the businesses we're working the hardest to make sure we can turn them around, if you will.

John Walsh -- Credit Suisse -- Analyst

Great. Thank you.

Jim Lico -- President and Chief Executive Officer

Thank you.

Operator

And our next question is from the line of Andrew Obin from Bank of America.

Andrew Obin -- Bank of America -- Analyst

Thanks for fitting me in. Just on Professional Instrumentation, as I think about Pacific Scientific, Tektronix a) how did the Federal-related revenues do in the quarter? And any impact from shutdown on the ability to collect the book business in the first quarter? Thank you.

Jim Lico -- President and Chief Executive Officer

Yes, interestingly enough very little. We had the business book. We were a little worried about EMC because they do have some resources that come in to approve the products before they ship, but the team did a great job in getting ahead of that. So we really had -- we had a little bit of impact at Gordian, but on balance probably within the weeds of a company of our size and scale. So thus far no direct impact. You might say maybe -- and I think it's too early to tell if there's any second or third derivative impact.

Andrew Obin -- Bank of America -- Analyst

Terrific. Thanks a lot.

Jim Lico -- President and Chief Executive Officer

Thanks, Andrew.

Operator

And our next question is from the line of Nigel Coe from Wolfe Research.

Nigel Coe -- Wolfe Research -- Analyst

Hi, good evening guys.

Jim Lico -- President and Chief Executive Officer

Hi, Nigel.

Nigel Coe -- Wolfe Research -- Analyst

So I hate to really beat the horse to death two or three times here, but Chuck I'm really struggling with the 1Q math and I know about folks that are as well. So maybe if we can explore that again. It seems to me that your organic and FX basically (inaudible) top line in 1Q. (inaudible) M&A roll forward from Gordian 1Q year-over-year and my math had the effect is down in the third quarter. So I'm really struggling to understand why your midpoint guidance is only $0.01 above of prior year. So maybe some help there would be good.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So, one thing, I think our tax rate is up in Q1, not down. You said our Q1 tax rate is down. Yes, our tax rate is going to be 17% in Q1 and I think it was around 15.3% and thereabouts in the prior year.

Nigel Coe -- Wolfe Research -- Analyst

Okay. So nothing else? Nothing -- all right, we'll take it offline.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So I talked about it a bit -- reiterating as long as we're beating a dead horses, FX $0.02 in the quarter. There's also headwinds as I mentioned from tax and we've had more shares this year, that's also has given us a little bit of headwind.

Nigel Coe -- Wolfe Research -- Analyst

Okay. We'll go through it more off line. And then on the PI margin, again we've touched on this as well. I think, Jim, you talked about some negative mix I think in PI. I think you referenced PI. I'm not going -- Fluke and Tektronix were very strong in the quarter. So was that negative mix in PI, is that a factor why margins were flattish? And then how does that -- and maybe then Chuck, if you could quantify more in detail, I'm not sure I've understood in the prepared remarks.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

So I don't think there was a mix impact in PI. I think we had -- there's two things going on in PI. There's -- tariffs primarily hits not entirely, but the biggest places it hits is in Fluke and Tek. So that probably gives us 60 basis points of headwind on our OMX. And the warranty is about $6 million and that's another 40 basis points as for the Company, but little bit -- probably another 60 basis points on the warranty. So when you look at those two -- those are the two headwinds why we're flat on our OMX. Otherwise, we'd be at triple-digits.

Jim Lico -- President and Chief Executive Officer

And Nigel, I think we might've been. In the prepared remarks we talked a little bit about mix, but that was overall. That was just a little bit more IT than PI. So that's what we're talking about there. So just a little bit of mix there. That's overall at Fortive. And as Chuck mentioned, the PE -- obviously answered all the questions within Professional Instrumentation. So we actually feel pretty good about the margins in PI in the fourth quarter. I mean, obviously we don't love a one-time charge for our warranty issue. But at the end of the day if you sort of push through that, that combined with the work our teams did to negate some pretty considerable tariffs, we think we did -- we're really pleased with where that ended up and I think it kind of put us in good shape as we get through the year in 2019.

Nigel Coe -- Wolfe Research -- Analyst

That's pretty helpful, Jim. To underline the point, Q1 PI margin is going to go up in Q1?

Jim Lico -- President and Chief Executive Officer

Yes.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes.

Nigel Coe -- Wolfe Research -- Analyst

Great. Thank guys.

Operator

And our next question is from the line of Joe Giordano from Cowen.

Joe Giordano -- Cowen -- Analyst

Hi guys, thanks for squeezing me in here.

Jim Lico -- President and Chief Executive Officer

Hi, Joe.

Joe Giordano -- Cowen -- Analyst

Just the M&A impact from acquisitions on PI really stepped up quite a bit from third quarter. I know you have more of the -- more time of Gordian and Accruent in there, but it was a little bit larger when we're thinking and I'm just curious how you think about that bleeding off into 2019 like on a cadence basis.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Are you talking about the step up around amortization or the step up on the deal cost?

Joe Giordano -- Cowen -- Analyst

Not the transaction cost, the minus 375 for acquisitions, yes.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Okay. On the revenue side, I think, well, they clearly -- we got full credit for both deals in the fourth quarter. So -- and so I think that number is probably -- obviously it's going to end -- it will go core in the fourth quarter of next year. So we should see -- the fourth quarter is always seasonally big for those businesses. So I wouldn't necessarily multiply that number by four.

Joe Giordano -- Cowen -- Analyst

No, sorry. I meant on the margin side, like on the PI on the operating margin you had acquisitions minus 375 basis points. Just curious how that kind of...

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, they'll absolutely get better through the year. There's -- we had very little impact on the margin in the quarter given where we closed for sure they'll continue to improve through the year.

Joe Giordano -- Cowen -- Analyst

Okay. And then a question on ASP. I mean, obviously sterilizations a big thing out of hospital. So I'm curious how the trend toward like single use, how -- like does that have any impact on ASP? Or how does that pull on that two kind of opposite trends?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

It doesn't because of the products that are used. Typically, there are products that are not necessarily going to fall into the single-use category. We've been tracking some technologies where those might be opportunities. But I think when we look at the exposure that our technologies and our products and the products that we sterilize to single-use, there's very little impact and still a lot of under penetration around the world. So US and Europe obviously standards and regulations are fairly developed.

But when you look around the world, we were in China about 1.5 months ago visiting our ASP team and clearly a lot of opportunity for underpenetrated market there in all forms of hospitals there. So I think on balance, yes, there's very little exposure to single-use. And certainly when you look at the underpenetrated side of the market, lots of growth opportunities. Interestingly enough, I was with a number of the sales leaders. They're here this week and we're with them as we roll out some of the Fortive business system tools with them and stuff and they're incredibly excited about the opportunity that's available to us. So I think across all fronts as we get more and more into the business, Joe, we see a growth opportunity.

Operator

And at this time I'm showing that we have no further questions. I'd like to turn the call back to Jim Lico for closing remarks.

Jim Lico -- President and Chief Executive Officer

Thanks, Ian, and thanks everybody for taking the time this evening. It's cold and snowy in Seattle. That's a pretty rare thing for us. But I think despite the weather we are incredibly excited about what's ahead of us in 2019. We obviously had a very strong finish to the quarter with over 7% core growth, our best core growth quarter in the history of the Company, 30% earnings growth. We think that's great, but on the other hand we know our best days are still yet to come given the great portfolio transformation work that we did in the year. So thanks for your support and obviously Griffin and team are available for questions and clarification tonight and tomorrow. Thanks everybody. Have a great night.

Operator

Ladies and gentlemen, this does conclude the conference call. We thank you for your participation. You may know disconnect.

Duration: 63 minutes

Call participants:

Griffin Whitney -- Vice President of Investor Relations

Jim Lico -- President and Chief Executive Officer

Scott Davis -- Melius Research -- Analyst

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Julian Mitchell -- Barclays -- Analyst

Steve Tusa -- JP Morgan -- Analyst

Andy Kaplowitz -- Citi -- Analyst

Jeffrey Sprague -- Vertical Research -- Analyst

John Inch -- Gordon Haskett -- Analyst

Richard Eastman -- Baird -- Analyst

Deane Dray -- RBC Capital Markets -- Analyst

Scott Graham -- BMO Capital Markets -- Analyst

Josh Pokrzywinski -- Morgan Stanley -- Analyst

John Walsh -- Credit Suisse -- Analyst

Andrew Obin -- Bank of America -- Analyst

Nigel Coe -- Wolfe Research -- Analyst

Joe Giordano -- Cowen -- Analyst

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