Techa Tungateja/Dreamstime
Swimming pools were a pandemic luxury and the trend toward spending on homes in a post-Covid world is still boosting the business of pool-equipment providers.
(ticker: POOL) and
(PNR) both posted strong first- quarter results. This coming year looks like another strong one for pool businesses.
Pool stock closed up 6.4% Thursday. Pentair shares were up slightly. The
and
both dropped 0.9%.
Pool reported record sales and blew away earnings estimates. “What an incredible quarter, backed by an incredible team,” CEO Peter Arvan said in a statement.
The company earned $2.42 a share from $1.1 billion in sales; analysts were looking from $1.17 in per-share earnings from $824 million in sales. And it raised full-year guidance, to a midpoint of $12.30 a share from $9.37.
“Pool continues to benefit from elevated demand in residential pool products amid Covid-19,” Baird analyst Dave Manthey wrote in a Thursday report, adding “no change in our favorable outlook.” He rates shares Buy.
Pentair had a strong quarter, too, but beat analyst estimates only by about 31%. The company earned 81 cents a share from $866 million in sales. Wall Street was looking for 62 cents in per-share earnings from $774 in sales.
Pool-related sales grew 49%, and Pentair increased full-year guidance, to a midpoint of $2.88 a share from $2.68.
Baird’s Michael Halloran pointed out that the amount of the guidance increase roughly matched the amount the company beat first-quarter earnings by. That might be one reason the stock didn’t rally as much as Pool. He added that he suspects second-quarter guidance of about 72 cents in per-share earnings is conservative.
Halloran called the results a robust beat, but still rates the stock Hold.
Despite the smaller gain, Pentair has the edge on Pool year to date. Pentair is up about 20% year to date. Pool, after the strong day, is up about 10% year to date.
Barron’s recently wrote positively about Pool, believing strong pool trends would continue into 2021 and beyond. Since that article, Pool stock is up about 13%, a couple of percentage points better than the S&P.
Write to Al Root at allen.root@dowjones.com
