Xylem in Q1: “slightly better” than expected, say management
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Xylem in Q1: “slightly better” than expected, say management

Global water technology company Xylem Inc. reported first quarter earnings on Tuesday – a mixed bag that nonetheless beat analysts expectations on earnings by 2%. The company reported a net income of $56 million, or $0.31 earnings per share, though post-adjustment those figures become $71 million and $0.39, respectively. This is a slight beat of the consensus estimate, and an 11% increase from the same quarter in the previous year. Total revenue for the quarter stood at $1.1 billion, 26% up, year-on-year. These figures are inclusive of Sensus, a recent acquisition by Xylem, which itself saw a 7% increase in revenue against the previous year’s quarter.  

Patrick Decker, Xylem’s president and CEO, made the following comment on the results:

“Our performance in the first quarter was slightly better than our expectations overall. There were a number of encouraging signs of growing strength in our most important end markets and geographies. First, our Sensus business delivered strong top-line growth. Second, we continued to see positive leading indicators in the public utility sector with orders growth of three percent, driven by an eight-percent increase in treatment orders. This further bolsters our confidence in the longer-term health of this sector. And we were pleased to see momentum continuing to build in key emerging markets, where our orders were up 14 percent in the quarter. These results underpin our outlook for solid growth this year.”

Xylem also reiterated its full year guidance for 2017. It expects revenue in the range of $4.5 to $4.6 billion, which would be an increase of between 20% and 22%. Full year operating margin is expected to be in the range of 13.2% to 13.7%. The company also upgraded its earnings estimates, now expecting to deliver between $2.23 and $2.38 per share.

Disclosure

Dominion holds Xylem Inc. in its Global Trends Managed Fund.


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