Fortive Corporation (NYSE:FTV) Q3 2020 Earnings Conference Call - Final Transcript

Oct 27, 2020 • 05:30 pm ET


Fortive Corporation (NYSE:FTV) Q3 2020 Earnings Conference Call - Final Transcript


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My name is Erica, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's Third Quarter 2020 Earnings Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. Mr. Whitney, you may begin your conference.

Griffin Whitney

Thank you, Erica. Good afternoon, everyone, and thank you for joining us on the call. With us today are Jim Lico, our President and Chief Executive Officer; and Chuck McLaughlin, our Senior Vice President and Chief Financial Officer. We present certain non-GAAP financial measures on today's call. Information required by SEC Regulation G relating to these non-GAAP financial measures are available on the Investors section of our website,, under the heading Financial Information. We completed the divestiture of the automation and specialty business on October 1, 2018, and accordingly have included the results of the A&S business as discontinued operations for historical periods.

The results presented on this call are based on continuing operations. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. All references to period-to-period increases or decreases and financial metrics are year-over-year on a continuing operations basis. During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future.

These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2019, and subsequent quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements.

With that, I'd like to turn the call over to Jim.

Jim Lico

Thanks, Griffin, and good afternoon, everyone. We are pleased with our third quarter results as strong execution across the portfolio delivered a top line performance that was significantly better than our initial guidance as well as a return to year-over-year growth in adjusted operating profit and adjusted earnings per share. For the quarter, we reported adjusted diluted net earnings per share of $0.94, an 8% increase year-over-year. While the operating environment remained challenging in Q3, we continued to successfully navigate the near-term headwinds by leveraging the Fortive Business System. We increased core operating margins by 160 basis points and generated another quarter of strong free cash flow while prioritizing growth investments across our portfolio to drive continued share gains.

On October 9, we completed the successful spin-off of Vontier Corporation, a global industrial technology company focused on mobility infrastructure. I'm extremely proud of the effort and the focus shown by our team throughout the year