Watts Water Technologies, Inc.
) has completed the sale of all outstanding shares of an indirect
wholly owned subsidiary, Watts Insulation GmbH. The transaction
amount was approximately $9 million.
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Watts Insulation - known as Austroflex before being acquired by
Watts Water three years ago - is an Austria-based manufacturer of
pre-insulated flexible pipe systems for heating and solar
applications. The unit failed to meet performance expectations
since its purchase, compelling Watts Water to dispose it.
The disposal will lead to a loss of about $2 million. Watts
Insulation's performance will be presented as discontinued
operations in the company's forthcoming earnings release.
Watts Water reported second quarter 2013 adjusted earnings of 57
cents per share, up 10% from the year-ago quarter on higher sales
in North America and Asia, cost reductions in North America as
well as share repurchases. Earnings beat the Zacks Consensus
Estimate of 55 cents by 4%. Total revenue nudged up 1% year over
year to $371.3 million but fell short of the Zacks Consensus
Estimate of $376 million.
Watts Water will be benefited by residential construction
recovery. Its focus on expanding business and leveraging
substantial market expansion opportunities in Asia will likely
aid growth. However, economic weakness in Europe still remains an
overhang on the company.
North Andover, Mass.-based Watts Water operates in the computer
and technology sector through its subsidiaries. The company is a
leading manufacturer of innovative products that control the
efficiency, safety, and quality of water within applications
(residential, commercial, and institutional). Its peers include
Roper Industries Inc.
Badger Meter Inc.
Watts Water retains a Zacks Rank #3 (Hold).