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November 20, 2025 • 3 min read
Fortive Corp., a diversified industrial technology company, recently released its financial results for the third quarter of 2025. At first glance, the numbers might seem confusing, with a sharp drop in overall net earnings. However, a deeper look into their latest 10-Q filing reveals a story of strategic transformation and solid performance in its core businesses. Let's break down the key details from their income statement.
Fortive's total sales for the quarter came in at $1.03 billion, a modest 2.3% increase from the $1.00 billion reported in the same period last year. The headline figure that catches the eye is the net earnings, which fell dramatically to $55 million from $222 million a year ago.
The reason for this drop isn't a collapse in the underlying business. Instead, it's due to the separation of their Precision Technologies (PT) business, now known as Ralliant Corporation. This segment is now classified as "discontinued operations." In Q3 2025, these discontinued operations resulted in a loss of $62 million, a stark contrast to the $110 million profit they generated in Q3 2024.
If we look only at the continuing operations—the core business Fortive is moving forward with—the picture is much brighter. Net earnings from continuing operations actually grew to $117 million, up from $111.5 million in the prior year. This shows that the company's ongoing segments are not only stable but improving their profitability.
The following flow diagram illustrates the company's revenue and expenses for the third quarter, providing a clear path from sales to net income for the continuing operations.
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Fortive's continuing operations are organized into two main segments, both of which showed positive results.
Both core segments are demonstrating their ability to grow and, more importantly, to convert that growth into higher profits.
The separation of the Precision Technologies business wasn't just an accounting exercise; it unlocked significant capital. Fortive received a hefty cash dividend of $1.15 billion from Ralliant in connection with the split.
How is the company using this cash? Primarily to reward its shareholders. During the nine months leading up to the report, Fortive repurchased approximately $1.35 billion worth of its own common stock. A large portion of these buybacks occurred in the third quarter alone, signaling management's confidence in the company's future value. The company also used proceeds from the dividend to pay down over $700 million in debt.
While the headline numbers for Fortive's Q3 were skewed by the strategic separation of its PT segment, the underlying story is one of positive momentum. The remaining core businesses in intelligent operating solutions and healthcare are showing steady growth and, crucially, significant margin improvement. By shedding a segment and using the proceeds to repurchase shares and reduce debt, Fortive is executing a clear strategy to become a more focused, profitable, and lean industrial technology leader. The challenge ahead will be to accelerate top-line growth in these core markets and prove that this leaner configuration can deliver sustained long-term value.
Last updated: November 20, 2025