Veralto tops Q3 profit estimates and raises 2026 earnings forecast

Veralto Corporation (VLTO) said on Oct. 29 that adjusted earnings for the third quarter reached $1.18 per diluted share, topping the $1.11 consensus estimate compiled by Finnhub. Revenue of $1.509 billion was below the $1.53 billion consensus estimate compiled by Finnhub.

The company also raised its full-year 2026 adjusted earnings forecast. The company said in a regulatory filing that the results cover the quarter ended Oct. 2.

Veralto has annual sales of approximately $5.5 billion and about 17,000 associates, according to the company.

Here's how the company did:

• Revenue: $1.509 billion vs. $1.404 billion a year earlier, below the $1.53 billion consensus estimate compiled by Finnhub
• Adjusted EPS: $1.18 vs. $0.99 a year earlier, topping the $1.11 consensus estimate compiled by Finnhub
• Net earnings: $253 million vs. $239 million a year earlier
• Diluted EPS, GAAP: $1.03 vs. $0.95 a year earlier

According to the company, adjusted earnings per share rose 19.2% year over year. The adjusted operating profit margin was 25.6%, up from 23.9% a year earlier.

Sales and margins

Core sales grew 5.1%, led by Water Quality at 6.4%. Product Quality and Innovation core sales rose 3.2%. Acquisitions contributed 2.3% to total sales growth.

“We delivered outstanding third-quarter results, with broad-based sales growth and strong operating leverage across the portfolio,” said Jennifer L. Honeycutt, President and Chief Executive Officer.

2026 guidance

For the fourth quarter, the company expects core sales growth of 5.5% to 6.5% and adjusted diluted EPS of $1.13 to $1.16. It expects an adjusted operating profit margin of about 24.5%.

For the full year, the company raised core sales growth to 4.2% to 4.5%, up from 4.0% to 4.5%. It raised adjusted diluted EPS to $4.49 to $4.52, from the $4.35 to $4.43 range it gave on July 28.

The company also raised its free cash flow conversion guidance to greater than 105% of GAAP net earnings, from greater than 100%. It expects the adjusted operating profit margin to expand about 50 basis points year over year, up from a prior range of 25 to 50 basis points.

Cash and capital returns

Operating cash flow was $323 million, and free cash flow was $304 million, up from $258 million a year earlier.

Year to date, the company deployed $1.1 billion on four acquisitions: In-Situ, GlobalVision, Alfaa UV and Cleanwater1. The Cleanwater1 acquisition closed on Oct. 5.

The company repurchased $550 million of shares, or 2.4% of outstanding shares, as of Oct. 28.

Costs and charges

Costs for the 2026 Cost Optimization Program were $22 million pretax in the quarter. The company now expects full-year 2026 savings of $10 million to $15 million from the program.

The company recorded a $39 million pretax reduction to a tax indemnification asset, tied to the settlement of a tax audit covering pre-separation periods.