July 28 (Reuters) – Water technology firm Pentair posted a fall in second-quarter sales on Tuesday, hurt by weak housing demand leading to pool channel destocking in the U.S., sending its shares down nearly 5% premarket.
The company also said it will buy hydronic and water-based solutions company Taco Group Holdings for $1.40 billion.
• CEO John L. Stauch said the quarter’s results came in below expectations, primarily due to a larger-than-anticipated inventory correction in the pool channel.
• The pool segment, one of Pentair’s three verticals and its most profitable, sells pumps, filters, heaters, automation systems and other equipment for residential and commercial swimming pools.
• Second-quarter sales fell 17% to $933 million, weighed down by roughly $170 million of inventory destocking in the pool channel.
• London-based Pentair reported an adjusted profit of $1.14 per share for the second quarter, below analysts’ expectations of $1.20, according to data compiled by LSEG.
• Pentair reaffirmed its full-year outlook, projecting adjusted earnings of $4.60 to $4.80 per share and a 4% to 7% decline in sales.
• Upon closing, Taco is planned to be a part of Pentair’s Water Solutions reportable segment, and it is expected to continue going to market under the Taco brand.
• The deal is expected to close in the fourth quarter of this year.
(Reporting by Nandan Mandayam and Megavarshini G. Somasundaram in Bengaluru; Editing by Vijay Kishore)
