Veralto Corp (VLTO, Financial), a global leader in essential water and product quality solutions, announced its Q3 2023 results on October 25, 2023. The company reported a 3% year-over-year (YoY) increase in sales to $1,255 million, with non-GAAP core sales growth of 1%. Operating profit margin was 21.8% and net earnings were $205 million, or $0.83 per diluted common share. Operating cash flow was $243 million and non-GAAP free cash flow was $232 million.
Financial Performance and Key Metrics
The company's operating profit margin for the quarter was 21.8%, with an adjusted operating profit margin of 22.4% after including estimated incremental stand-alone costs. Net earnings for the quarter were $205 million, translating to $0.83 per diluted common share. Adjusted diluted net earnings per common share were $0.75, after accounting for estimated incremental stand-alone costs and estimated interest expense on the company's current capital structure.
Operating cash flow for the quarter was $243 million, and non-GAAP free cash flow was $232 million. The company also announced plans to initiate a quarterly dividend of $0.09 per common share in arrears in Q4 2023.
“The third quarter 2023 marks a significant milestone for Veralto as we successfully completed our separation from Danaher. I’m proud of our team for their efforts related to the separation while also driving solid operating execution during the quarter in support of our customers.” - Jennifer L. Honeycutt, President and Chief Executive Officer
Future Outlook
For Q4 2023, Veralto Corp (VLTO, Financial) anticipates that non-GAAP core sales will be flat to down low-single digits year-over-year. This is primarily due to reduced demand for consumer-packaged goods impacting sales in its Product Quality and Innovation segment and continued demand weakness in China. The company anticipates adjusted operating profit margin in the range of 23.5% to 24.5% and adjusted diluted earnings per share in the range of $0.79 to $0.84.
Conclusion
Veralto Corp (VLTO, Financial) has shown a steady performance in Q3 2023, with a 3% YoY increase in sales and a strong operating profit margin. The company's future outlook, however, indicates a potential slowdown in sales growth due to reduced demand in certain segments. Despite this, Veralto Corp (VLTO) remains confident in its ability to deliver sustainable, long-term shareholder value.
Explore the complete 8-K earnings release (here) from Veralto Corp for further details.
