Vontier reported higher underlying sales and sharply improved operating margins in the third quarter, despite a decline in reported revenue that reflected its divestiture of Teletrac Navman. The mobility-technology company also raised its full-year adjusted earnings-per-share outlook and issued guidance for the fourth quarter.
Key details
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Sales: Revenue was $736.9 million, down 2.1% from a year earlier. Core sales, which exclude the effect of the Teletrac Navman divestiture, rose 5.7%.
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Earnings and margins: Operating profit increased 11.2% to $158.4 million, and operating margin expanded about 260 basis points to 21.5%. On an adjusted basis, operating profit rose 12.1% to $179.3 million, while adjusted operating margin increased 300 basis points to 24.3%.
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Per-share results: GAAP net earnings were $99.0 million, or $0.73 per diluted share. Adjusted net earnings were $124.3 million, or $0.92 per diluted share.
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Cash generation: Operating cash flow was $142.8 million. Adjusted free cash flow was $133.1 million, equal to 107% of adjusted net earnings.
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Environmental & Fueling Solutions: Sales grew 8.7% to $388.9 million, with core sales up 13.1%. The company cited demand for fuel-dispensing and environmental equipment, as well as aftermarket parts. Segment operating profit rose 17.6% to $122.8 million, and its margin increased 2.4 percentage points to 31.6%.
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Mobility Technologies: Reported sales fell 13.7% to $233.6 million, but core sales increased 2.2%, reflecting demand for convenience-retail payment, store-automation and asset-management technologies. Segment operating profit rose 20.6% to $60.4 million, and its margin widened 7.4 percentage points to 25.9%. Vontier attributed the margin improvement primarily to cost savings from its simplification initiatives.
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Fourth-quarter outlook: Vontier set a range of $0.99 to $1.03 for adjusted diluted earnings per share in the fourth quarter.
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Full-year outlook: The company raised its 2026 adjusted diluted earnings-per-share guidance to $3.60–$3.64.
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Management’s assessment: Chief Executive Mark Morelli said third-quarter results exceeded the company’s guidance across sales, margins and earnings per share. He also said savings from simplification and the company’s “80/20” initiatives were running ahead of the original commitment.
What changes for investors
The reported sales decline masks growth in core sales, while both segments posted higher operating profit and improved margins. The clearest near-term change is the higher full-year adjusted EPS outlook, alongside Vontier’s new fourth-quarter earnings range.