Pentair (PNR) has announced a 2.29 times jump in profit for the quarter ended Mar. 29, 2014, helped by expansion in operating margin. The company earned $118.60 million or $0.59 a share in the first-quarter, compared with $51.70 million or $0.25 a share a year ago.

Revenue during the first-quarter went down marginally 2.78 percent to $1725.20 million from $1774.50 million in the last year period.

Gross margin expanded by 400 basis points over the last year period to 33.52 percent. Total expenses as a percentage of revenues decreased to 89.57 percent from 95.81 percent in the same period last year. That resulted in improvement of 624 basis points in operating margin to 10.43 percent.

The company reported operating income of $171.90 million, compared with an operating income of $74.3 million in the previous year period.

The company continues to expect full year 2014 adjusted EPS to be between $3.85 - $4.00, which represents an increase of approximately 22 percent from 2013 adjusted EPS of $3.21.  

The company anticipates full year 2014 sales of $7.7 billion, or up approximately 2 to 4 percent over 2013 sales. The company expects to generate free cash flow in excess of 105 percent of net income in 2014.

"We expect to deliver another year of strong double-digit EPS growth," said Randall J Hogan, Pentair chairman and chief executive officer. 

''We continue to have confidence in our ability to deliver on the areas within our control.  We believe the second quarter will represent our last significant year-over-year Australian project headwind and the second half should show improving growth,'' Hogan added.

In addition, the company introduced second quarter 2014 adjusted EPS guidance of $1.02 - $1.05, up approximately 13 percent versus the same quarter last year's adjusted EPS.  The company expects second quarter revenue to be approximately $1.95 billion, which is flat to down 1 percent compared to second quarter 2013 revenue.

Cash flow

Pentair has generated cash of $0.60 million from operating activities during the quarter, down 96.98 percent or $19.30 million when compared with the last year period. It has generated 0.03 cents of operating cash flow in every sales dollar for the quarter, down from 1.12 cents for the same period last year.

The company has spent $27.30 million in cash to meet investing activities during the quarter, as against cash outgo of $18.50 million in the year period. It has made net capital expenditure of $26.80 million during the quarter, which was lower by 45.08 percent or $22 million from a year ago.

The company has spent $24.70 million in cash to meet financing activities during the quarter, as against cash outgo of $38.20 million in the last year period.

The company has borrowed net of $381.30 million through debt during the quarter. It has spent net of $228.20 million on common stock repurchases. The company's cash dividend payment increased 4.24 percent or $2 million to $49.20 million. Dividend payment accounted for 8,200 percent of operating cash flow for the quarter, of Mar. 29, 2014 from 237.19 percent in the same period previous year.

As on Mar. 29, 2014, Pentair's cash balance stood at $211.10 million, down 1.59 percent or $3.4 million from Mar. 30, 2013.

Working Capital

Pentair witnessed reduction in the working capital over the year. It stood at $1777.20 million as at Mar. 29, 2014, down $29.80 million or 1.65 percent from $1,807 million on Mar. 30, 2013. The company's current ratio decreased to 2.16 as at Mar. 29, 2014 from 2.22 on Mar. 30, 2013.

Debt Position

Pentair has witnessed an increase in total debt over the last year. As at Mar. 29, 2014, the company's total debt stood at $2936.60 million, up 13.03 percent or $338.60 million from Mar. 30, 2013.

The company's total debt accounts for 24.96 percent of total assets on Mar. 29, 2014, compared with 22.17 percent on Mar. 30, 2013.

Shares of Pentair fell $5.53 or 6.87 percent to close at $74.70 on Tuesday.