Watts Water Technologies
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Watts Water Technologies met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share expanded significantly.
Gross margin dropped, operating margin dropped, and net margin grew.
Watts Water Technologies reported revenue of $360.2 million. The 10 analysts polled by S&P Capital IQ hoped for revenue of $362.5 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $316.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.56. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.60 per share on the same basis. GAAP EPS of $0.47 for Q4 were 52% higher than the prior-year quarter's $0.31 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 34.2%, 150 basis points worse than the prior-year quarter. Operating margin was 6.6%, 510 basis points worse than the prior-year quarter. Net margin was 4.7%, 110 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $370.0 million. On the bottom line, the average EPS estimate is $0.60.
Next year's average estimate for revenue is $1.51 billion. The average EPS estimate is $2.59.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 355 members rating the stock outperform and 17 members rating it underperform. Among 113 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 111 give Watts Water Technologies a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Watts Water Technologies is hold, with an average price target of $41.00.
Over the decades, small-cap stocks like Watts Water Technologies have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Watts Water Technologies to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Updating Investors on the Commercial Construction Market
Many hopes are being placed on commercial construction in 2014, but what are leading industrial companies exposed to the sector saying?
Will Watts Water Technologies Inc. Soak up Big Profits in 2014?
Watts Water Technologies is looking good in 2014, especially given its commercial construction focus. What's more, peer Pentair looks strong, too. Will 2014 be the year of water products?
2 Hot Picks in Commercial Construction
Lennox International and A.O Smith are well placed to grow in 2014 with the next upswing in the commercial construction sector.