Veralto Raises Full-Year Outlook as Third-Quarter Adjusted EPS Rises 19%

Veralto raised its full-year adjusted earnings outlook to $4.49 to $4.52 a share after third-quarter sales grew 7.5% and adjusted earnings per share rose 19.2%, according to the earnings release the water and product quality company filed with an 8-K on Thursday.

The new range compares with prior guidance of $4.35 to $4.43 a share and would represent 15% to 16% growth over 2025, the company said.

Sales for the quarter ended Oct. 2 rose to $1.51 billion from $1.40 billion. Core sales, which exclude acquisitions and currency, grew 5.1%, and acquisitions added 2.3 percentage points.

Adjusted earnings were $1.18 a share, up from 99 cents a year earlier. On a reported basis, net earnings rose to $253 million, or $1.03 a share, from $239 million, or 95 cents.

"We delivered outstanding third-quarter results, with broad-based sales growth and strong operating leverage across the portfolio," President and CEO Jennifer L. Honeycutt said in the release.

Water leads the way

Water Quality sales rose 9.8%, including 6.4% core growth. Honeycutt said core sales of water treatment solutions grew by double digits, driven by industrial trends in North America including "digital infrastructure investments, higher industrial production and increasing need for water reuse solutions."

The Product Quality and Innovation segment grew sales 3.9%, with core growth of 3.2%. Honeycutt said its core growth rate increased sequentially, supported by marking and coding demand and faster growth in packaging and color.

Margins and charges

Adjusted operating profit margin widened 170 basis points to 25.6%. The reported operating margin was 19.7%, as the quarter included $22 million of restructuring costs and a $39 million reduction of a tax indemnification asset, which were excluded from adjusted results. Operating profit was $298 million, compared with $326 million a year earlier.

Veralto said early gains from its cost optimization program should yield $10 million to $15 million of savings in 2026.

Deals, buybacks and guidance

As of Oct. 28, Veralto had spent $1.1 billion on four acquisitions this year, In-Situ, GlobalVision, Alfaa UV and Cleanwater1, the last of which closed Oct. 5. It also repurchased $550 million of stock, or 2.4% of its outstanding shares.

Operating cash flow rose to $323 million from $270 million, and free cash flow increased to $304 million from $258 million.

For the fourth quarter, Veralto expects core sales growth of 5.5% to 6.5%, an adjusted operating margin of about 24.5% and adjusted earnings of $1.13 to $1.16 a share.

For the full year, it raised its core sales growth forecast to 4.2% to 4.5% from 4.0% to 4.5%, now expects adjusted operating margin to expand about 50 basis points instead of 25 to 50 basis points, and lifted its free cash flow conversion target to more than 105% of net earnings from more than 100%.

The company will host its earnings call at 7:30 a.m. ET on Friday.

Sources

1. Veralto Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001967680-26-000047)

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