Pentair plc today announced second quarter 2014 sales of $1.9 billion. Sales were down 3 percent compared to sales for the same period last year. Adjusted second quarter 2014 earnings per diluted share were $1.04, up 13 percent from adjusted EPS of $0.92 in the second quarter of last year.
On a GAAP basis, the company reported EPS of $0.82 compared to EPS of $0.75 in the second quarter of 2013. Adjusted EPS and operating income exclude repositioning costs, acquisition and redomicile-related expenses, gain/loss on sale of a business and certain tax items.
Second quarter 2014 adjusted operating income was $283 million, up 5 percent compared to adjusted operating income for second quarter 2013, and adjusted operating margins were 14.8 percent, an expansion of 110 basis points when compared to adjusted 2013 operating margins. On a GAAP basis, the company reported operating income of $228 million.
Free cash flow in the quarter was $384 million and $358 million for the first half of 2014. The company expects to deliver full year free cash flow greater than 110 percent of net income.
Pentair paid dividends of $0.25 per share in each of the first and second quarters of 2014. Pentair had previously announced on May 20, 2014 the approval by its shareholders of an ordinary cash dividend of $1.20 per share in four equal quarterly installments of $0.30 in each of the third and fourth quarter of 2014 and the first and second quarter of 2015. Pentair has increased its dividend for 38 consecutive years.
On July 28, 2014, Pentair's Board of Directors approved a decision to exit its Water Transport business.
Excluding Water Transport, second quarter sales were $1.8 billion, up 2 percent compared to the same period last year, second quarter 2014 adjusted operating income was $279 million, up 13 percent compared to adjusted operating income for second quarter 2013, and adjusted operating margins were 15.2 percent, an expansion of 150 basis points when compared to adjusted 2013 operating margins.
"Our second quarter met our expectations with many of our end markets recovering, albeit at a more moderate rate than anticipated," said Randall J. Hogan, Pentair Chairman and Chief Executive Officer.