LONDON, United Kingdom — Pentair plc announced second quarter 2017 sales of $1.3 billion. Sales were down 3 percent compared to sales for the same period last year. Excluding currency translation and acquisitions, core sales declined 3 percent in the second quarter. Second quarter 2017 earnings per diluted share from continuing operations ("EPS") were $0.37 compared to $0.73 in the second quarter of 2016. On an adjusted basis, the company reported EPS of $1.00 compared to $0.88 in the second quarter of 2016. Segment income, adjusted net income, free cash flow, and adjusted EPS are described in the attached schedules.
Second quarter 2017 operating income was $213 million, up 5 percent compared to operating income for the second quarter of 2016, and return on sales ("ROS") was 16.8 percent, an increase of 120 basis points when compared to the second quarter of 2016. On an adjusted basis, the company reported segment income of $255 million for the second quarter, up 6 percent compared to segment income for the second quarter of 2016, and ROS was 20.2 percent, an increase of 170 basis points when compared to the second quarter of 2016.
Net cash provided by operating activities of continuing operations was $300 million and free cash flow from continuing operations was $289 million for the quarter. The company is targeting to deliver full year free cash flow of approximately 100 percent of adjusted net income.
Pentair paid dividends of $0.345 per share in the second quarter of 2017. Pentair previously announced on December 8, 2016 that its Board of Directors approved a 3 percent increase in the company's regular annual cash dividend rate for 2017 to $1.38 from $1.34. 2017 marks the 41st consecutive year that Pentair has increased its dividend.
"Our second quarter results saw both of our businesses continue to build momentum driven by strength in our Residential, Commercial, and short cycle Industrial businesses," said Randall J. Hogan, Pentair Chairman and Chief Executive Officer. "We have made significant progress on our productivity actions as evidenced by the robust margin expansion we delivered for the second consecutive quarter. With the completion of the sale of our Valves & Controls business, our balance sheet is significantly strengthened, and we remain disciplined in our capital allocation strategy. Significant work is underway on all activities leading to the separation of our Water and Electrical businesses, which remains on track to be completed in the second quarter of 2018."
The company updates its estimated 2017 GAAP EPS to approximately $2.47 and on an adjusted EPS basis to approximately $3.50. The company anticipates full year 2017 sales of $4.9 billion, or approximately flat on a reported and core basis. The company is targeting to deliver full year free cash flow of approximately 100 percent of adjusted net income.
In addition, the company introduces third quarter 2017 GAAP EPS guidance range of $0.80 to $0.82 and, on an adjusted EPS basis, a range of $0.91 to $0.93, up approximately 18% on an adjusted EPS basis versus the same quarter last year. The company expects third quarter revenue to be approximately $1.22 billion, which would be up approximately 1 percent on a reported and core basis compared to third quarter 2016 revenue.
Full financial results can be found here.