PNR earnings analysis
What we found in PNR's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Pentair's Q2 revenue fell 17.0% year over year to $932.6 million, driven by a 42.3% Pool sales decline, and operating margin fell 1.5 points to 17.9%; the filing excerpt does not disclose quarterly GAAP diluted EPS. Gross margin improved 1.7 points to 42.4%, but higher restructuring and transformation costs outweighed this benefit below gross profit. Flow and Water Solutions posted substantial segment-margin gains, while $467.2 million of first-half free cash flow supports liquidity; however, Pool destocking is expected to reduce full-year sales by approximately $250 million and the Taco transaction introduces $1.4 billion of prospective bridge financing.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Gross margin expanded despite sales pressure
- Gross margin expanded 1.7 points year over year to 42.4%, and improved 0.6 points from 41.8% in Q1 2026. Pricing, productivity and $34.9 million of IEEPA tariff refunds more than offset raw-material inflation at the gross-profit level.
- Flow delivered growth and margin expansion
- Flow sales rose 5.1% to $263.7 million and segment income increased 27.4% to $69.8 million. Segment margin expanded 4.7 points to 26.5%, supported by Hydra-Stop, pricing, productivity and $5.4 million of tariff refunds.
- Water Solutions margin strengthened
- Water Solutions segment income increased 16.5% to $126.4 million despite a 5.1% revenue decline to $422.0 million. Its segment margin rose 5.6 points to 30.0%, including $18.3 million of tariff refunds.
- Strong first-half cash conversion
- Six-month operating cash flow was $504.4 million and free cash flow was $467.2 million, after $37.4 million of capital expenditures. Capex represented 7.4% of operating cash flow.
- Material shareholder capital returns
- The company repurchased 4.0 million shares for $350.0 million in the first half and retained $650.0 million under its authorization as of June 30, 2026. It also paid $87.5 million of dividends.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Pool-channel reset sharply impaired Q2
- Pool sales fell 42.3% year over year to $246.6 million, while segment income declined 62.3% to $57.6 million and segment margin contracted 12.3 points to 23.4%. Management attributes the volume decline principally to channel destocking and expects this destocking to reduce 2026 sales by approximately $250 million.
- Revenue and operating profit contracted
- Consolidated sales declined 17.0% year over year to $932.6 million; operating income fell 23.5% to $166.5 million and operating margin declined 1.5 points to 17.9%. Revenue also fell 10.3% from Q1 2026 sales of $1.04 billion.
- Taco deal adds integration and leverage risk
- New Taco-acquisition risk factors cite potentially unachieved or delayed synergies and undisclosed liabilities. The planned $1.425 billion acquisition is supported by a committed $1.4 billion bridge facility, on top of $1.606 billion of consolidated debt at June 30, 2026.
- Transformation spending pressured operating margin
- Restructuring costs increased to $34.6 million from $14.3 million year over year, while transformation costs rose to $17.5 million from $12.7 million. These costs helped raise SG&A as a percentage of sales by 3.0 points to 22.0%.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 42.4%
- Operating margin
- 17.9%
- Segment
- Flow: $263.7 million, up 5.1% year over year
- Segment
- Water Solutions: $422.0 million, down 5.1% year over year
- Segment
- Pool: $246.6 million, down 42.3% year over year
What they said about what is next.
The 10-Q does not provide numeric EPS or revenue guidance. Management expects Pool-channel destocking to reduce 2026 net sales by approximately $250 million, expects Taco to close in Q4 2026, and expects inflationary and supply-chain pressures to persist through the remainder of 2026.
The filing reads worse than the one before it.
What came before.
- 10-Q · April 28, 2026
- Pentair reported Q1 2026 revenue of $1,036.7 million, up $26.3 million or 2.6% year-over-year, with gross margin improving to 41.8% (up 1.9 pts) and operating income of $210.0 million (20.3% of sales). Segment strength…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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