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Fortive's (FTV) Q2 Earnings and Revenues Beat Estimates

Fortive Corporation FTV reported second-quarter 2020 earnings of 68 cents per share, which outpaced the Zacks Consensus Estimate of 58 cents. The figure decreased 24.4% from the year-ago quarter but increased 8.1% on a sequential basis.

Revenues decreased 15.7% year over year and 8.3% sequentially to $1.57 billion. Also, core revenues declined 16.8% from the year-ago quarter.

However, the top line outpaced the Zacks Consensus Estimate by 2.9%.

Fortive Corporation Price, Consensus and EPS Surprise

Fortive Corporation Price, Consensus and EPS Surprise

Fortive Corporation price-consensus-eps-surprise-chart | Fortive Corporation Quote

Top Line in Detail

Fortive operates under the following two organized segments.

Professional Instrumentation: The segment generated revenues of $1.03 billion (accounting for 66% of total second-quarter revenues), which decreased 11% on a year-over-year basis.

Industrial Technologies: This segment generated revenues of $533.7 million (34% of total revenues), which declined 23.7% from the prior-year quarter.

Operating Details

In the second quarter, gross margin came in at 51.8%, which expanded 330 basis points (bps) year over year.

Total operating expenses were $623.2 million, reflecting a 4.8% year-over-year decrease. As a percentage of revenues, both selling, general & administrative expenses as well as research & development costs increased from the year-ago quarter.

Operating margin was 12.2%, which contracted 120 bps on a year-over-year basis.

Segment wise, operating margin from Professional Instrumentation came in at 13.1%, which expanded 200 bps year over year.

Industrial Technologies operating margins came in at 15.5% versus 20.7% in the year-ago quarter.

Guidance

Though the company did not provide full guidance for the third quarter, it expects total revenues to decline 5-8% on a year-over-year basis. The projection, however, indicates a sequential improvement.

Zacks Rank & Other Key Picks

Fortive currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Microchip Technology Incorporated MCHP, eBay EBAY and Advanced Micro Devices, Inc. AMD. While Microchip Technology and eBay sport a Zacks Rank #1 (Strong Buy), Advanced Micro carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Microchip Technology, eBay, and Advanced Micro is currently projected at 14.5%, 11.7% and 40.3%, respectively.

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