Shares of Pentair (NYSE:PNR) tumbled more than 12% by 10:30 a.m. EDT Tuesday in the wake of the water solutions company revising its guidance for 2019.
Pentair put out a press release providing preliminary first-quarter results and a revision to its full-year guidance. The water solutions specialist now expects revenue to decline 6% year over year during the first quarter to $689 million. That's a significant shift for a company that initially expected a 1% sales increase. Pentair also cut its adjusted earnings outlook for the quarter from a range of $0.52-$0.55 per share to $0.43 per share.
The company noted that adverse cold and wet weather conditions "significantly impacted" the first-quarter results of its high-margin aquatics and agriculture-related businesses. On top of that, Pentair experienced "moderating growth in several of our end markets," according to CEO John Stauch, as well as "higher than anticipated inventory levels in some of our key distribution channels."
That slow start to the year led Pentair to water down its full-year forecast. The company now sees sales rising 1% to 2% this year, which is well below its prior view of 5% to 6% revenue growth. Meanwhile, it lowered its adjusted earnings range from $2.50-$2.60 per share down to $2.30-$2.35 per share.
Pentair plans to address its slow start by adjusting costs and implementing actions to improve productivity. These initiatives should position the company for better results in 2020. However, given the seasonal nature of its aquatics and agriculture businesses, investors will need to wait a year to see if this was just a one-time issue or part of a longer-term problem.