Veralto reported third-quarter sales growth, higher adjusted margins and earnings, and strong cash generation for the quarter ended Oct. 2. The water- and product-quality company also raised its full-year adjusted earnings outlook, citing expected sales growth, early savings from a cost-cutting program and its third-quarter performance.
The update also highlights substantial capital deployment so far in 2026: Veralto spent $1.1 billion on four acquisitions and bought back $550 million of its shares.
Third-quarter results
- Sales rose 7.5% year over year to $1.509 billion. Adjusting for acquisitions and other factors, core sales grew 5.1%; acquisitions added 2.3 percentage points to total sales growth.
- Water Quality core sales grew 6.4%. Veralto said water-treatment sales grew at a double-digit rate, supported by industrial demand in North America, including digital-infrastructure investment and interest in water reuse. Demand for water analytics products and services was steady.
- Growth in the product-quality business improved sequentially. The company pointed to steady demand in marking and coding and faster year-over-year growth in packaging and color.
- Operating profit margin was 19.7%; adjusted operating margin was 25.6%. The adjusted margin expanded 170 basis points from a year earlier.
- Net earnings were $253 million, or $1.03 per diluted share. On an adjusted basis, earnings were $290 million, or $1.18 per diluted share. Adjusted earnings per share increased 19.2% year over year.
- Operating cash flow was $323 million, with adjusted free cash flow of $304 million.
Outlook and capital allocation
- Veralto expects fourth-quarter core sales growth of 5.5% to 6.5% year over year.
- The company raised its 2026 adjusted earnings-per-share outlook to $4.49–$4.52, which it said would represent 15% to 16% growth from the prior year.
- Four acquisitions have been completed year to date for a combined $1.1 billion: In-Situ, GlobalVision, Alfaa UV and Cleanwater.
- Veralto repurchased $550 million of stock, equivalent to 2.4% of its outstanding shares.
- Expected full-year 2026 savings from the cost-optimization program are now $10 million to $15 million. The company said it is already seeing early gains.
The results show growth across both business segments, with acquisitions adding to reported sales and Water Quality leading core growth. The higher earnings outlook combines the company’s stated expectations for fourth-quarter sales growth with cost savings and the strong third-quarter performance; the acquisition spending and buybacks describe how Veralto has allocated capital so far this year.