(WTS) - Watts Water Technologies, Inc - exceeded analysts’ earnings expectations for four consecutive quarters by an average margin of 16.2%

Watts Water Technologies, Inc. (WTS) beat analysts’ earnings expectations for four straight quarters, most recently by 19.6%. Consensus estimates for both 2006 and 2007 have risen over the past 60 days. Earnings per share are forecasted to grow 10.0% over the next 3-5 years. This Zacks #1 Rank stock is currently yielding 0.88% and its return on equity of 14% tops the industry average of 13%. Full Analysis Watts Water Technologies, Inc. designs, manufactures and sells various water safety and flow control products primarily for the water quality, water safety, water flow control and water conservation markets in North America, Europe and China. The company sells its products through wholesale distributors, do-it-yourself chains and original equipment manufacturers. WTS exceeded analysts’ earnings expectations for four consecutive quarters by an average margin of 16.2%. On Oct 31, the company posted third-quarter profits of 67 cents per share. The result represented a solid 19.6% positive surprise and an impressive 63.4% year-over-year improvement. Revenues ballooned 39.7% to $325.1 million from $232.7 million last year. Increased prices to cover higher costs for raw materials such as copper, coupled with higher sales of plumbing and heating products, fueled the company’s sales. Furthermore, WTS’s recent acquisitions also contributed to its growth. The company acquired Black Teknigas, Limited on Aug 14 and Calflex Manufacturing, Inc. on Jun 2. Black Teknigas has annual revenues of 8 million Euros, while Calflex Manufacturing, Inc. has $7 million in annual revenues. For the first nine months of the year, profits experienced a 40.4% leap to $55.6 million, while revenues rose 32.4% to $900.3 million versus the first nine months of 2005. WTS increased revenues for the past six years, expanded gross margins for the past four and grew profits for five years running. Consensus estimates for this quarter and next quarter have risen 7.0% and 9.1%, respectively, over the past 60 days. Profit forecasts for the full years of 2006 and 2007 are up 7.5% and 6.9%, respectively, over the past two months. Earnings per share are forecasted to grow 10.0% over the next 3-5 years. On Oct 31, the Board of Directors declared a quarterly cash dividend of nine cents per common share of stock. The dividend is payable on Dec 8 to stockholders of record as of Nov 27. WTS has a current dividend yield of 0.88% and a five-year average dividend yield of 1.2%. Management has been effective in building shareholder value, made clear by the company’s return on equity of 14%. This is slightly higher than the industry’s return on equity of 13%. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home