Xylem’s Q1 Earnings Surpass Expectations, Leading to Increased Full-Year Guidance.

Xylem Inc. (NYSE:XYL), a global leader in water technology, reported a robust first quarter with earnings and revenue surpassing analyst estimates and a raised outlook for the full year.

The company’s first-quarter adjusted earnings per share (EPS) of $0.90 beat the consensus estimate by $0.06, while revenue for the quarter reached $2.03 billion, topping expectations by $30 million.

The company’s operational excellence and strong demand across its segments propelled a 43% reported and 3% organic increase in orders, while revenue saw a 40% reported and 7% organic rise. Compared to the same quarter last year, the revenue increase underscores Xylem’s growing market presence.

The company’s stock edged up by 1% in response to the positive earnings release and the announcement of increased guidance, reflecting a cautiously optimistic investor sentiment.

CEO Matthew Pine credited the strong quarter to the team’s performance and Xylem’s momentum, with record first-quarter margins.

“The team outperformed on all metrics and continued Xylem’s strong momentum, including record first-quarter margins,” said Matthew Pine, Xylem’s president and CEO. “Operational performance was robust on healthy demand across most segments and regions. We’re also on track to capture the synergies of our integration with Evoqua, and are driving simplification across our business to lock in and extend our margin improvements over time.”

“We are raising our full-year guidance on the strength of the team’s demonstrated ability to capitalize on our markets’ resilient demand. We are confident that Xylem’s platform of solutions is uniquely positioned to enable our customers and communities to become more water-secure, even as the world becomes more water-challenged.”

Looking ahead, Xylem raised its full-year 2024 revenue guidance to approximately $8.5 billion, indicating a 15% to 16% increase on a reported basis and a 4% to 6% organic growth, up from the previously forecasted 3% to 5%.

Adjusted EPS guidance for the full year has also been lifted to a range of $4.10 to $4.25, from the prior $4.00 to $4.20 range. This updated guidance aligns with the consensus estimate for EPS and meets the revenue consensus of $8.5 billion.

The first-quarter net income margin grew by 70 basis points to 7.5%, with net income reaching $153 million or $0.63 per share. Adjusted net income stood at $219 million, excluding various costs and special items.

The adjusted EBITDA margin for the quarter was 19.2%, a significant year-over-year increase due to productivity savings, favorable mix, and volume, which outpaced inflation and strategic investments.

Xylem’s confidence in its solutions platform and its ability to meet the growing challenges of water security was echoed by Pine.

“We are confident that Xylem’s platform of solutions is uniquely positioned to enable our customers and communities to become more water-secure,”  Pine stated, reinforcing the company’s strategic direction and market position.

Source : Xylem

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