Earnings Analysis for PNR
Revenue Analysis
Total and Operating Revenue: PNR showed a steady increase in total and operating revenue over the observed periods, growing from $984.6 million in December 2023 to $1,017.2 million by March 2024. This demonstrates a continuous growth in core business operations.
Gross Profit: Parallel to revenue growth, gross profit also increased from $366.1 million in December 2023 to $390.1 million in March 2024, indicating improved profitability before deducting operating expenses.
Cost Management
Cost of Revenue: The cost of revenue has also been rising, from $618.5 million in December 2023 to $627.1 million by March 2024, suggesting that the revenue growth was accompanied by a proportional increase in the cost of generating revenue.
Operating Expense: Total operating expenses include costs like selling, general and administrative expenses, which showed an increase from $199.1 million in December 2023 to $209.3 million by March 2024.
Total Expenses: Total expenses have followed a similar upward trend, from $817.6 million in December 2023 to $836.4 million in March 2024.
Profitability Analysis
EBITDA: Earnings before interest, taxes, depreciation, and amortization (EBITDA) have seen a significant improvement, rising from $189.6 million in December 2023 to $209.1 million by March 2024.
Operating Income: Operating income has increased from $167.0 million in December 2023 to $180.8 million by March 2024, reflecting better operational efficiency.
Pretax Income: Pretax income, which measures profitability before tax deductions, increased from $134.0 million in December 2023 to $153.4 million by March 2024.
Net Income: Net income from continuing operations saw a decrease from $208.1 million in December 2023 to $133.5 million in March 2024, despite overall growth in revenues and gross profits, possibly influenced by higher costs or other factors.
Cash Flow Indicators
Reconciled Depreciation: The depreciation expense, reflecting capital asset wear and tear, has been consistent at around $28.4-29.0 million.
Interest Expense: The interest expense stayed stable at about $27.3 million in March 2024, which indicates consistent financing costs.
Taxation
Tax Rate: The effective tax rate has varied, with a notable calculation rate of 21% in December 2023 and 13% by March 2024.
Tax Provision: Correspondingly, the tax provision was a net positive in March 2024 amounting to $19.9 million, as opposed to a negative $74.1 million in December 2023.
Tax Effect of Unusual Items: There were no tax effects from unusual items, indicating that presented income figures were from regular operations.
Shareholder Metrics
Diluted and Basic EPS: Earnings per Share (EPS) both diluted and basic have decreased from $1.25 and $1.26 respectively in December 2023 to $0.8 by March 2024.
Average Shares: The number of average diluted shares increased slightly from 166.7 million in December 2023 to 167.2 million by March 2024.
Net Income Available to Common Stockholders: This metric mirrored the net income trends, standing at $208.0 million in December 2023 and decreasing to $133.3 million by March 2024.
Conclusion
PNR exhibited steady growth in revenue and gross profit across the observed periods. However, increases in costs and expenses have somewhat offset these gains, as seen in the decrease in net income. This analysis suggests further investigation into cost control and efficiency improvements could benefit PNR’s future profitability.