NEW YORK - 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.
"Operational performance was robust on healthy demand across most segments and regions," Pine said. He also highlighted the company's efforts in integrating Evoqua and driving business simplification as key factors in margin improvements.
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," he stated, reinforcing the company's strategic direction and market position.
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