Red Flag Note- Pentair plc (PNR)

Signs that future profits may have been pulled forward in 1Q24

Pentair (PNR) reported non-GAAP EPS of $0.94 in 1Q24 which beat the consensus by 4 cps. This follows a 4Q23 beat of 1 cps. However, we saw multiple warning signs in the revenue recognition numbers that could be indicating that revenues were pulled forward at the expense of future quarters as well as a drop in a reserve account that could have provided a meaningful boost to EPS in the period.

As with all Red Flag Notes, we caution that this report does not represent a full earnings quality review of the company. We may perform more work on PNR and follow up with additional concerns.

Now, let’s get behind the numbers…

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