In This Article:
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Adjusted Earnings Per Share (EPS): $0.85, in line with expectations.
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Core Revenue Decline: 2% in the quarter.
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Total Revenue Decline: 3%, impacted by FX headwinds.
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Adjusted Operating Profit: $373 million.
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Adjusted Operating Margin Expansion: 20 basis points.
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Adjusted Free Cash Flow: $222 million, better than expected.
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Share Repurchases: 2.5 million shares in the first quarter.
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Intelligent Operating Solutions Core Revenue Growth: 2%.
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Advanced Healthcare Solutions Core Revenue Growth: 2.5%.
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Precision Technologies Core Revenue Decline: 8.4%.
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Adjusted Operating Margin Contraction in Precision Technologies: 260 basis points.
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Second Quarter Adjusted EPS Guidance: $0.85 to $0.90.
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Full Year 2025 Adjusted EPS Guidance: $3.80 to $4.00.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Fortive Corp (NYSE:FTV) delivered a solid first quarter performance with adjusted earnings per share of $0.85, in line with expectations.
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The company expanded both adjusted gross and operating margins despite slightly lower-than-expected revenues.
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Fortive Corp (NYSE:FTV) demonstrated strong cash flow generation and continued share repurchases, reflecting a commitment to value-enhancing capital deployment.
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The Intelligent Operating Solutions and Advanced Healthcare Solutions segments showed sustained top-line momentum.
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Fortive Corp (NYSE:FTV) has reduced its exposure to imports from China by 70% since 2018, enhancing supply chain and manufacturing resilience.
Negative Points
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Core revenue declined by 2% in the quarter, slightly below expectations, with total revenue down 3% due to FX headwinds.
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Precision Technologies segment experienced an 8.4% core decline, driven by lower-than-expected orders and shipment delays.
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The company faces challenges from newly announced tariffs, with an estimated gross impact of $190 million to $220 million.
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Test and Measurement core revenue declined by high teens, with significant declines in Western Europe and China.
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Adjusted operating profit margins contracted by 260 basis points in the Precision Technologies segment due to lower volumes and unfavorable mix.
Q & A Highlights
Q: Can you clarify what you mean by localizing production in response to tariffs? Are you building new capacity in the US? A: James Lico, President and CEO, explained that Fortive has been derisking its supply chain over the years without significant new investments. The company is accelerating existing plans to reduce reliance on China, focusing on contract manufacturing and current facilities rather than building new capacity.