Latest news with #MatthewPine
Yahoo
31-07-2025
- Business
- Yahoo
Xylem raises 2025 forecasts on strong demand for its water solutions
(Reuters) -Water technology firm Xylem on Thursday raised its annual sales and profit forecasts, citing resilient demand and strong operational performance that helped the company surpass Wall Street estimates for its second-quarter results. Shares of the company rose about 2% in premarket trading. The company said productivity savings and strong price realization drove margin expansion that exceeded the impact of inflation. "Our simplification efforts have already yielded measurable gains in speed, accountability, and customer responsiveness," CEO Matthew Pine said in a statement. Xylem now expects adjusted earnings per share in 2025 to range between $4.70 and $4.85, up from its prior forecast of between $4.50 and $4.70. The company projected 2025 sales of $8.90 billion and $9 billion, above its previous expectations of $8.70 billion to $8.80 billion. Analysts, on average, had expected earnings of $4.64 per share and sales of $8.76 billion, according to LSEG-compiled data. Sales from Xylem's water infrastructure unit, which sells products like water and wastewater pumps, was $650 million in the quarter, exceeding analysts' expectations of $640.27 million. Its applied water unit, which sells pumps, valves and other equipment, recorded sales of $483 million, above expectations of $462.27 million. On an adjusted basis, Xylem earned $1.26 per share for the quarter, while analysts on average expected the company to earn $1.16 per share. The company reported quarterly revenue of $2.30 billion, compared with analysts' estimates of $2.21 billion. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31-07-2025
- Business
- Yahoo
Xylem Reports Second Quarter 2025 Results
Revenue of $2.3 billion, up 6% on a reported and organic basis Earnings per share of $0.93, up 16%; $1.26 on an adjusted basis, also up 16% Raising full-year 2025 revenue and adjusted earnings per share guidance WASHINGTON, July 31, 2025--(BUSINESS WIRE)--Xylem Inc. (NYSE: XYL), a leading global water solutions company dedicated to solving the world's most challenging water issues, today reported second-quarter 2025 results. The Company delivered total revenue of $2.3 billion, on strong execution and demand. Second-quarter earnings per share were up 16 percent on a reported and adjusted basis. "Our team delivered another strong quarter, exceeding expectations with robust organic revenue growth across all segments, a record-high adjusted EBITDA margin, and double-digit EPS growth," said Matthew Pine, Xylem's president and CEO. "Based on our team's disciplined execution on resilient underlying demand, we are raising our full-year guidance." "This performance underscores the transformation of our operating model. Our simplification efforts have already yielded measurable gains in speed, accountability, and customer responsiveness. We continue to build energy and momentum across the enterprise, reinforcing our confidence in delivering a strong second half and a clear path to profitable, above-market growth and long-term value creation." Net income attributable to Xylem for the quarter was $226 million, or $0.93 per share. Net income margin increased 90 basis points to 9.8 percent, driven by strong operational performance. Adjusted net income was $307 million, or $1.26 per share, which excludes the impacts of purchase accounting intangible amortization, restructuring and realignment costs, special charges, tax-related specials and the net tax impact of these adjustments. Second-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 21.8 percent, reflecting a year-over-year increase of 100 basis points. Productivity savings and strong price realization drove the margin expansion, exceeding the impact of inflation and mix. Outlook Xylem now forecasts full-year 2025 revenue of approximately $8.9 to $9.0 billion, up approximately 4 to 5 percent on a reported basis, versus 1 to 2 percent previously guided, and up approximately 4 percent on an organic basis. Full-year 2025 adjusted EBITDA margin is expected to be approximately 21.3 to 21.8 percent, an increase of 70 to 120 basis points from Xylem's 2024 adjusted results. This results in full-year adjusted earnings per share of $4.70 to $4.85, versus the previous guide of $4.50 to $4.70. Full-year free cash flow margin is still expected to be approximately 9 to 10 percent. Further 2025 planning assumptions are included in Xylem's second-quarter 2025 earnings materials posted at Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. Outlook is being provided in the context of the current volatility, including due to geopolitical, trade, macroeconomic and regulatory uncertainty. Supplemental information on Xylem's second-quarter earnings, as well as definitions of and reconciliations for certain non-GAAP items, is posted at About Xylem Xylem (XYL) is a Fortune 500 global water solutions company that empowers customers and communities to build a more water-secure world. Our 23,000 diverse employees delivered revenue of $8.6 billion in 2024, optimizing water and resource management with innovation and expertise. Join us at and Let's Solve Water. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words "anticipate," "estimate," "expect," "project," "intend," "plan," "contemplate," "predict," "forecast," "likely," "believe," "target," "will," "could," "would," "should," "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector spending, interest rates, inflation and related monetary policy by governments in response to inflation, and the strength of the residential and commercial real estate markets, on economic activity and our operations; geopolitical events, including ongoing, possible escalation or outbreak of international conflicts, as well as regulatory, economic and other risks associated with our global sales and operations, including those related to domestic content requirements applicable to projects receiving governmental funding; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, tight labor markets, prevailing price changes, tariffs, trade policies and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including electronic components (in particular, semiconductors); disruptions in operations at our facilities or that of third parties upon which we rely; uncertainty related to the realization of the benefits and synergies from our acquisition of Evoqua Water Technologies Corp.; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including with respect to meeting performance guarantees and customers' budgets, timelines and safety requirements; our ability to retain and attract leadership and other diverse and key talent, as well as competition for overall talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth, including related to acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, including the effects of climate change; risks related to our sustainability commitments and related disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; financial market risks related to our pension and other defined benefit plans; failure to comply with, or changes in, laws or regulations, including those pertaining to our business conduct, operations, products and services, including anti-corruption, data privacy and security, trade, competition, the environment, climate change and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report") and in subsequent filings we make with the Securities and Exchange Commission ("SEC"). Forward-looking and other statements in this press release regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited) (in millions, except per share data) Three Months Six Months For the periods ended June 30, 2025 2024 2025 2024 Revenue from products $ 1,911 $ 1,802 $ 3,620 $ 3,492 Revenue from services 390 $ 367 $ 750 $ 710 Revenue 2,301 2,169 $ 4,370 $ 4,202 Cost of revenue from products 1,129 1,079 2,170 2,100 Cost of revenue from services 280 271 540 531 Cost of revenue 1,409 1,350 2,710 2,631 Gross profit 892 819 1,660 1,571 Selling, general and administrative expenses 503 485 963 959 Research and development expenses 58 58 114 117 Restructuring and asset impairment charges 26 23 47 33 Operating income 305 253 536 462 Interest expense (9 ) (11 ) (17 ) (25 ) Other non-operating income, net 3 4 7 10 (Loss)/gain on sale of businesses — 1 (10 ) (4 ) Income before taxes 299 247 516 443 Income tax expense (75 ) (53 ) (125 ) (96 ) Net income $ 224 $ 194 $ 391 $ 347 Net loss attributable to non-controlling interests 2 — $ 4 $ — Net income attributable to Xylem $ 226 $ 194 $ 395 $ 347 Earnings per share: Basic $ 0.93 $ 0.80 $ 1.62 $ 1.43 Diluted $ 0.93 $ 0.80 $ 1.62 $ 1.43 Weighted average number of shares: Basic 243.4 242.6 243.3 242.2 Diluted 243.9 243.5 243.8 243.3 XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions) June 30, 2025 December 31,2024 ASSETS Current assets: Cash and cash equivalents $ 1,170 $ 1,121 Receivables, less allowances for discounts, returns and credit losses of $61 and $59 in 2025 and 2024, respectively 1,837 1,668 Inventories 1,071 996 Prepaid and other current assets 283 236 Assets held for sale 8 77 Total current assets 4,369 4,098 Property, plant and equipment, net 1,189 1,152 Goodwill 8,237 7,980 Other intangible assets, net 2,354 2,379 Other non-current assets 1,042 884 Total assets $ 17,191 $ 16,493 LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,047 $ 1,006 Accrued and other current liabilities 1,186 1,271 Short-term borrowings and current maturities of long-term debt 68 38 Liabilities held for sale — 21 Total current liabilities 2,301 2,336 Long-term debt 1,928 1,978 Accrued post-retirement benefit obligations 340 304 Deferred income tax liabilities 427 497 Other non-current accrued liabilities 886 496 Total liabilities 5,882 5,611 Redeemable non-controlling interest 228 235 Stockholders' equity: Common stock – par value $0.01 per share: Authorized 750.0 shares, issued 259.7 shares and 259.2 shares in 2025 and 2024, respectively 3 3 Capital in excess of par value 8,720 8,687 Retained earnings 3,339 3,140 Treasury stock – at cost 16.3 shares and 16.2 shares in 2025 and 2024, respectively (766 ) (753 ) Accumulated other comprehensive loss (222 ) (435 ) Total stockholders' equity 11,074 10,642 Non-controlling interests 7 5 Total equity 11,081 10,647 Total liabilities, redeemable non-controlling interest, and stockholders' equity $ 17,191 $ 16,493 XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) For the six months ended June 30, 2025 2024 Operating Activities Net income $ 395 $ 347 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 137 123 Amortization 153 156 Share-based compensation 25 31 Restructuring and asset impairment charges 47 33 Loss from sale of business 10 4 Other, net 6 (4 ) Payments for restructuring (36 ) (18 ) Changes in assets and liabilities (net of acquisitions): Changes in receivables (103 ) (84 ) Changes in inventories (27 ) (75 ) Changes in accounts payable 6 (2 ) Changes in accrued and deferred taxes (50 ) (14 ) Other, net (225 ) (120 ) Net Cash – Operating activities 338 377 Investing Activities Capital expenditures (169 ) (147 ) Acquisitions of businesses, net of cash acquired (7 ) (5 ) Proceeds from sale of businesses, net of cash disposed 50 11 Proceeds from the sale of property, plant and equipment 5 3 Cash received from investments — 4 Cash paid for investments — (7 ) Cash paid for equity investments (3 ) (2 ) Cash paid for asset acquisition (37 ) — Cash received from cross-currency swaps 21 14 Other, net — 1 Net Cash – Investing activities (140 ) (128 ) Financing Activities Short-term debt issued, net 4 — Short-term debt repaid — (268 ) Long-term debt repaid (28 ) (9 ) Repurchase of common stock (13 ) (18 ) Proceeds from exercise of employee stock options 8 63 Dividends paid (196 ) (175 ) Other, net (19 ) (12 ) Net Cash – Financing activities (244 ) (419 ) Effect of exchange rate changes on cash 84 (34 ) Changes in cash classified within assets held for sale 11 — Net change in cash and cash equivalents 49 (204 ) Cash and cash equivalents at beginning of year 1,121 1,019 Cash and cash equivalents at end of period $ 1,170 $ 815 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 32 $ 36 Income taxes (net of refunds received) $ 175 $ 110 Xylem Inc. Non-GAAP Measures Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted") measures to be useful to management and investors evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including but not limited to, dividends, acquisitions, share repurchases and debt repayment. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following items to represent the non-GAAP measures that we consider to be key performance indicators, as well as the related reconciling items to the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies. "Organic revenue" and "Organic orders" defined as revenue and orders, respectively, excluding the impact of fluctuations in foreign currency translation and contributions from acquisitions and divestitures. Divestitures include sales or discontinuance of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the same currency conversion rate. "Constant currency" defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar. "EBITDA" defined as earnings before interest, taxes, depreciation and amortization expense. "Adjusted EBITDA" and "Adjusted Segment EBITDA" reflect the adjustments to EBITDA and segment EBITDA, respectively, to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses and special charges. "Adjusted EBITDA Margin" and "Adjusted Segment EBITDA Margin" defined as adjusted EBITDA and adjusted segment EBITDA divided by total revenue and segment revenue, respectively. "Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted Net Income" and "Adjusted EPS" defined as operating income, segment operating income, net income attributable to Xylem and earnings per share attributable to Xylem, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, special charges and tax-related special items, as applicable. "Adjusted Operating Margin" and "Adjusted Segment Operating Margin" defined as adjusted operating income and adjusted segment operating income divided by total revenue and segment revenue, respectively. "Free Cash Flow" defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures. Our definition of free cash flow does not consider certain non-discretionary cash payments, such as debt. "Free Cash Flow Margin" defined as free cash flow, adjusted (as applicable) for significant cash paid or received for non-operational tax, acquisition or divestiture activities; divided by revenue. "Realignment costs" defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs. "Special charges" defined as non-recurring costs incurred by the Company, such those related to acquisitions and integrations, divestitures and non-cash impairment charges. "Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments. Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic and Constant Currency Revenue ($ Millions) (As Reported - GAAP) (As Adjusted - Organic) ConstantCurrency (A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) / A Change % Change Acquisitions /Divestitures Change % Change Revenue Revenue 2025 v. 2024 2025 v. 2024 FX Impact Adj. 2025 v. 2024 Adj. 2025 v. 2024 2025 2024 Six Months Ended June 30 Xylem Inc. 4,370 4,202 168 4 % 16 3 187 4% 4% Water Infrastructure 1,231 1,205 26 2 % 29 (1 ) 54 4% 2% Applied Water 918 892 26 3 % - - 26 3% 3% Measurement and Control Solutions 1,030 944 86 9 % (13 ) - 73 8% 9% Water Solutions and Services 1,191 1,161 30 3 % - 4 34 3% 3% Quarter Ended June 30 Xylem Inc. 2,301 2,169 132 6 % 11 (23 ) 120 6% 5% Water Infrastructure 650 631 19 3 % 19 (12 ) 26 4% 1% Applied Water 483 456 27 6 % - (6 ) 21 5% 5% Measurement and Control Solutions 540 482 58 12 % (8 ) (4 ) 46 10% 11% Water Solutions and Services 628 600 28 5 % - (1 ) 27 5% 5% Quarter Ended March 31 Xylem Inc. 2,069 2,033 36 2 % 5 26 67 3% 3% Water Infrastructure 581 574 7 1 % 10 11 28 5% 3% Applied Water 435 436 (1 ) (0 %) - 6 5 1% 1% Measurement and Control Solutions 490 462 28 6 % (5 ) 4 27 6% 7% Water Solutions and Services 563 561 2 0 % - 5 7 1% 1% Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($ Millions, except per share amounts) Q2 2025 Q2 2024 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 2,301 - 2,301 2,169 - 2,169 Operating Income 305 96 a 401 253 99 a 352 Operating Margin 13.3 % 17.4 % 11.7 % 16.2 % Interest Expense (9 ) - (9 ) (11 ) - (11 ) Other Non-Operating Income (Expense) 3 - 3 4 - 4 Gain/(Loss) From Sale of Business - - b - 1 (1 ) b - Income before Taxes 299 96 395 247 98 345 Provision for Income Taxes (75 ) (15 ) c (90 ) (53 ) (26 ) c (79 ) Net Income 224 81 305 194 72 266 Net Loss Attributable to Non-controlling Interests 2 - 2 - - - Net Income Attributable to Xylem 226 81 307 194 72 266 Diluted Shares 243.9 243.9 243.5 243.5 Diluted EPS $ 0.93 $ 0.33 $ 1.26 $ 0.80 $ 0.29 $ 1.09 Q2 YTD 2025 Q2 YTD 2024 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 4,370 - 4,370 4,202 - 4,202 Operating Income 536 191 a 727 462 184 a 646 Operating Margin 12.3 % 16.6 % 11.0 % 15.4 % Interest Expense (17 ) - (17 ) (25 ) - (25 ) Other Non-Operating Income (Expense) 7 - 7 10 - 10 Gain/(Loss) From Sale of Business (10 ) 10 b - (4 ) 4 b - Income before Taxes 516 201 717 443 188 631 Provision for Income Taxes (125 ) (37 ) c (162 ) (96 ) (50 ) c (146 ) Net Income 391 164 555 347 138 485 Net Loss Attributable to Non-controlling Interests 4 - 4 - - - Net Income Attributable to Xylem 395 164 559 347 138 485 Diluted Shares 243.8 243.8 243.3 243.3 Diluted EPS $ 1.62 $ 0.67 $ 2.29 $ 1.43 $ 0.56 $ 1.99 a Quarter-to-date: Restructuring & realignment costs: 2025 - $29 million and 2024 - $29 million Special charges: 2025 - $9 million of acquisition, divestiture & integration costs and $4 million of intangible asset impairment charges; 2024 - $13 million of acquisition & integration costs Purchase accounting intangible amortization: 2025 - $54 million and 2024 - $57 million Year-to-date: Restructuring & realignment costs: 2025 - $56 million and 2024 - $44 million Special charges: 2025 - $17 million of acquisition, divestiture & integration costs and $8 million of intangible asset impairment charges; 2024 - $28 million of acquisition & integration related costs and $1 million of asset impairment charges Purchase accounting intangible amortization: 2025 - $110 million and 2024 - $111 million b Gain/(Loss) from sale of business as per income statement for all periods presented c Quarter-to-date: 2025 - Net tax impact on pre-tax adjustments (note a and b) of $20 million and $5 million of other tax special expense items; 2024 - Net tax impact on pre-tax adjustments (note a and b) of $20 million and other tax special benefit items of $6 million; Year-to-date: 2025 - Net tax impact on pre-tax adjustments (note a and b) of $42 million and other tax special expense items of $5 million; 2024 - Net tax impact on pre-tax adjustments (note a and b) of $42 million and other tax special benefits of $8 million; Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) 2025 Q1 Q2 Q3 Q4 Total Net Income attributable to Xylem 169 226 395 Net Income margin 8.2 % 9.8 % N/A N/A 9.0 % Depreciation 68 69 137 Amortization 77 76 153 Interest Expense (Income), net - 3 3 Income Tax Expense 50 75 125 EBITDA 364 449 - - 813 Share-based Compensation 12 13 25 Restructuring & Realignment 27 29 56 Special Charges 12 13 25 Loss/(Gain) from sale of business 10 - 10 Loss attributable to non-controlling interest (2 ) (2 ) (4 ) Adjusted EBITDA 423 502 - - 925 Revenue 2,069 2,301 4,370 Adjusted EBITDA Margin 20.4 % 21.8 % N/A N/A 21.2 % 2024 Q1 Q2 Q3 Q4 Total Net Income 153 194 217 326 890 Net Income margin 7.5 % 8.9 % 10.3 % 14.5 % 10.4 % Depreciation 61 62 68 67 258 Amortization 73 83 73 75 304 Interest Expense (Income), net 7 6 5 (2 ) 16 Income Tax Expense 43 53 52 49 197 EBITDA 337 398 415 515 1,665 Share-based Compensation 18 13 12 13 56 Restructuring & Realignment 15 29 11 36 91 Special Charges 16 13 7 21 57 Gain on joint venture remeasurement - - - (152 ) (152 ) Loss/(Gain) from sale of business 5 (1 ) 2 40 46 Adjusted EBITDA 391 452 447 473 1,763 Revenue 2,033 2,169 2,104 2,256 8,562 Adjusted EBITDA Margin 19.2 % 20.8 % 21.2 % 21.0 % 20.6 % View source version on Contacts MediaHouston Spencer+1 (914) InvestorsKeith Buettner+1 (724)
Business Wire
31-07-2025
- Business
- Business Wire
Xylem Reports Second Quarter 2025 Results
WASHINGTON--(BUSINESS WIRE)--Xylem Inc. (NYSE: XYL), a leading global water solutions company dedicated to solving the world's most challenging water issues, today reported second-quarter 2025 results. The Company delivered total revenue of $2.3 billion, on strong execution and demand. Second-quarter earnings per share were up 16 percent on a reported and adjusted basis. 'Our team delivered another strong quarter, exceeding expectations with robust organic revenue growth across all segments, a record-high adjusted EBITDA margin, and double-digit EPS growth,' said Matthew Pine, Xylem's president and CEO. 'Based on our team's disciplined execution on resilient underlying demand, we are raising our full-year guidance.' 'This performance underscores the transformation of our operating model. Our simplification efforts have already yielded measurable gains in speed, accountability, and customer responsiveness. We continue to build energy and momentum across the enterprise, reinforcing our confidence in delivering a strong second half and a clear path to profitable, above-market growth and long-term value creation.' Net income attributable to Xylem for the quarter was $226 million, or $0.93 per share. Net income margin increased 90 basis points to 9.8 percent, driven by strong operational performance. Adjusted net income was $307 million, or $1.26 per share, which excludes the impacts of purchase accounting intangible amortization, restructuring and realignment costs, special charges, tax-related specials and the net tax impact of these adjustments. Second-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 21.8 percent, reflecting a year-over-year increase of 100 basis points. Productivity savings and strong price realization drove the margin expansion, exceeding the impact of inflation and mix. Outlook Xylem now forecasts full-year 2025 revenue of approximately $8.9 to $9.0 billion, up approximately 4 to 5 percent on a reported basis, versus 1 to 2 percent previously guided, and up approximately 4 percent on an organic basis. Full-year 2025 adjusted EBITDA margin is expected to be approximately 21.3 to 21.8 percent, an increase of 70 to 120 basis points from Xylem's 2024 adjusted results. This results in full-year adjusted earnings per share of $4.70 to $4.85, versus the previous guide of $4.50 to $4.70. Full-year free cash flow margin is still expected to be approximately 9 to 10 percent. Further 2025 planning assumptions are included in Xylem's second-quarter 2025 earnings materials posted at Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. Outlook is being provided in the context of the current volatility, including due to geopolitical, trade, macroeconomic and regulatory uncertainty. Supplemental information on Xylem's second-quarter earnings, as well as definitions of and reconciliations for certain non-GAAP items, is posted at About Xylem Xylem (XYL) is a Fortune 500 global water solutions company that empowers customers and communities to build a more water-secure world. Our 23,000 diverse employees delivered revenue of $8.6 billion in 2024, optimizing water and resource management with innovation and expertise. Join us at and Let's Solve Water. Forward-Looking Statements This press release contains 'forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words 'anticipate,' 'estimate,' 'expect,' 'project,' 'intend,' 'plan,' "contemplate," "predict," 'forecast,' 'likely,' 'believe,' 'target,' 'will,' 'could,' 'would,' 'should,' "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector spending, interest rates, inflation and related monetary policy by governments in response to inflation, and the strength of the residential and commercial real estate markets, on economic activity and our operations; geopolitical events, including ongoing, possible escalation or outbreak of international conflicts, as well as regulatory, economic and other risks associated with our global sales and operations, including those related to domestic content requirements applicable to projects receiving governmental funding; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, tight labor markets, prevailing price changes, tariffs, trade policies and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including electronic components (in particular, semiconductors); disruptions in operations at our facilities or that of third parties upon which we rely; uncertainty related to the realization of the benefits and synergies from our acquisition of Evoqua Water Technologies Corp.; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including with respect to meeting performance guarantees and customers' budgets, timelines and safety requirements; our ability to retain and attract leadership and other diverse and key talent, as well as competition for overall talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth, including related to acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, including the effects of climate change; risks related to our sustainability commitments and related disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; financial market risks related to our pension and other defined benefit plans; failure to comply with, or changes in, laws or regulations, including those pertaining to our business conduct, operations, products and services, including anti-corruption, data privacy and security, trade, competition, the environment, climate change and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under 'Item 1A. Risk Factors' in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report") and in subsequent filings we make with the Securities and Exchange Commission ('SEC'). Forward-looking and other statements in this press release regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. XYLEM INC. AND SUBSIDIARIES (in millions) June 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 1,170 $ 1,121 Receivables, less allowances for discounts, returns and credit losses of $61 and $59 in 2025 and 2024, respectively 1,837 1,668 Inventories 1,071 996 Prepaid and other current assets 283 236 Assets held for sale 8 77 Total current assets 4,369 4,098 Property, plant and equipment, net 1,189 1,152 Goodwill 8,237 7,980 Other intangible assets, net 2,354 2,379 Other non-current assets 1,042 884 Total assets $ 17,191 $ 16,493 LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,047 $ 1,006 Accrued and other current liabilities 1,186 1,271 Short-term borrowings and current maturities of long-term debt 68 38 Liabilities held for sale — 21 Total current liabilities 2,301 2,336 Long-term debt 1,928 1,978 Accrued post-retirement benefit obligations 340 304 Deferred income tax liabilities 427 497 Other non-current accrued liabilities 886 496 Total liabilities 5,882 5,611 Redeemable non-controlling interest 228 235 Stockholders' equity: Common stock – par value $0.01 per share: Authorized 750.0 shares, issued 259.7 shares and 259.2 shares in 2025 and 2024, respectively 3 3 Capital in excess of par value 8,720 8,687 Retained earnings 3,339 3,140 Treasury stock – at cost 16.3 shares and 16.2 shares in 2025 and 2024, respectively (766 ) (753 ) Accumulated other comprehensive loss (222 ) (435 ) Total stockholders' equity 11,074 10,642 Non-controlling interests 7 5 Total equity 11,081 10,647 Total liabilities, redeemable non-controlling interest, and stockholders' equity $ 17,191 $ 16,493 Expand XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) For the six months ended June 30, 2025 2024 Operating Activities Net income $ 395 $ 347 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 137 123 Amortization 153 156 Share-based compensation 25 31 Restructuring and asset impairment charges 47 33 Loss from sale of business 10 4 Other, net 6 (4 ) Payments for restructuring (36 ) (18 ) Changes in assets and liabilities (net of acquisitions): Changes in receivables (103 ) (84 ) Changes in inventories (27 ) (75 ) Changes in accounts payable 6 (2 ) Changes in accrued and deferred taxes (50 ) (14 ) Other, net (225 ) (120 ) Net Cash – Operating activities 338 377 Investing Activities Capital expenditures (169 ) (147 ) Acquisitions of businesses, net of cash acquired (7 ) (5 ) Proceeds from sale of businesses, net of cash disposed 50 11 Proceeds from the sale of property, plant and equipment 5 3 Cash received from investments — 4 Cash paid for investments — (7 ) Cash paid for equity investments (3 ) (2 ) Cash paid for asset acquisition (37 ) — Cash received from cross-currency swaps 21 14 Other, net — 1 Net Cash – Investing activities (140 ) (128 ) Financing Activities Short-term debt issued, net 4 — Short-term debt repaid — (268 ) Long-term debt repaid (28 ) (9 ) Repurchase of common stock (13 ) (18 ) Proceeds from exercise of employee stock options 8 63 Dividends paid (196 ) (175 ) Other, net (19 ) (12 ) Net Cash – Financing activities (244 ) (419 ) Effect of exchange rate changes on cash 84 (34 ) Changes in cash classified within assets held for sale 11 — Net change in cash and cash equivalents 49 (204 ) Cash and cash equivalents at beginning of year 1,121 1,019 Cash and cash equivalents at end of period $ 1,170 $ 815 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 32 $ 36 Income taxes (net of refunds received) $ 175 $ 110 Expand Xylem Inc. Non-GAAP Measures Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted") measures to be useful to management and investors evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including but not limited to, dividends, acquisitions, share repurchases and debt repayment. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following items to represent the non-GAAP measures that we consider to be key performance indicators, as well as the related reconciling items to the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 'Organic revenue" and "Organic orders' defined as revenue and orders, respectively, excluding the impact of fluctuations in foreign currency translation and contributions from acquisitions and divestitures. Divestitures include sales or discontinuance of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the same currency conversion rate. 'Constant currency' defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar. 'EBITDA' defined as earnings before interest, taxes, depreciation and amortization expense. 'Adjusted EBITDA' and "Adjusted Segment EBITDA" reflect the adjustments to EBITDA and segment EBITDA, respectively, to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses and special charges. "Adjusted EBITDA Margin" and "Adjusted Segment EBITDA Margin" defined as adjusted EBITDA and adjusted segment EBITDA divided by total revenue and segment revenue, respectively. "Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted Net Income" and 'Adjusted EPS' defined as operating income, segment operating income, net income attributable to Xylem and earnings per share attributable to Xylem, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, special charges and tax-related special items, as applicable. "Adjusted Operating Margin" and "Adjusted Segment Operating Margin" defined as adjusted operating income and adjusted segment operating income divided by total revenue and segment revenue, respectively. 'Free Cash Flow' defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures. Our definition of free cash flow does not consider certain non-discretionary cash payments, such as debt. "Free Cash Flow Margin" defined as free cash flow, adjusted (as applicable) for significant cash paid or received for non-operational tax, acquisition or divestiture activities; divided by revenue. 'Realignment costs' defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs. 'Special charges" defined as non-recurring costs incurred by the Company, such those related to acquisitions and integrations, divestitures and non-cash impairment charges. 'Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments. Expand Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($ Millions, except per share amounts) Q2 2025 Q2 2024 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 2,301 - 2,301 2,169 - 2,169 Operating Income 305 96 a 401 253 99 a 352 Operating Margin 13.3 % 17.4 % 11.7 % 16.2 % Interest Expense (9 ) - (9 ) (11 ) - (11 ) Other Non-Operating Income (Expense) 3 - 3 4 - 4 Gain/(Loss) From Sale of Business - - b - 1 (1 ) b - Income before Taxes 299 96 395 247 98 345 Provision for Income Taxes (75 ) (15 ) c (90 ) (53 ) (26 ) c (79 ) Net Income 224 81 305 194 72 266 Net Loss Attributable to Non-controlling Interests 2 - 2 - - - Net Income Attributable to Xylem 226 81 307 194 72 266 Diluted Shares 243.9 243.9 243.5 243.5 Diluted EPS $ 0.93 $ 0.33 $ 1.26 $ 0.80 $ 0.29 $ 1.09 Q2 YTD 2025 Q2 YTD 2024 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 4,370 - 4,370 4,202 - 4,202 Operating Income 536 191 a 727 462 184 a 646 Operating Margin 12.3 % 16.6 % 11.0 % 15.4 % Interest Expense (17 ) - (17 ) (25 ) - (25 ) Other Non-Operating Income (Expense) 7 - 7 10 - 10 Gain/(Loss) From Sale of Business (10 ) 10 b - (4 ) 4 b - Income before Taxes 516 201 717 443 188 631 Provision for Income Taxes (125 ) (37 ) c (162 ) (96 ) (50 ) c (146 ) Net Income 391 164 555 347 138 485 Net Loss Attributable to Non-controlling Interests 4 - 4 - - - Net Income Attributable to Xylem 395 164 559 347 138 485 Diluted Shares 243.8 243.8 243.3 243.3 Diluted EPS $ 1.62 $ 0.67 $ 2.29 $ 1.43 $ 0.56 $ 1.99 a Quarter-to-date: Restructuring & realignment costs: 2025 - $29 million and 2024 - $29 million Special charges: 2025 - $9 million of acquisition, divestiture & integration costs and $4 million of intangible asset impairment charges; 2024 - $13 million of acquisition & integration costs Purchase accounting intangible amortization: 2025 - $54 million and 2024 - $57 million Year-to-date: Restructuring & realignment costs: 2025 - $56 million and 2024 - $44 million Special charges: 2025 - $17 million of acquisition, divestiture & integration costs and $8 million of intangible asset impairment charges; 2024 - $28 million of acquisition & integration related costs and $1 million of asset impairment charges Purchase accounting intangible amortization: 2025 - $110 million and 2024 - $111 million b Gain/(Loss) from sale of business as per income statement for all periods presented c Quarter-to-date: 2025 - Net tax impact on pre-tax adjustments (note a and b) of $20 million and $5 million of other tax special expense items; 2024 - Net tax impact on pre-tax adjustments (note a and b) of $20 million and other tax special benefit items of $6 million; Year-to-date: 2025 - Net tax impact on pre-tax adjustments (note a and b) of $42 million and other tax special expense items of $5 million; 2024 - Net tax impact on pre-tax adjustments (note a and b) of $42 million and other tax special benefits of $8 million; Expand Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) 2025 Q1 Q2 Q3 Q4 Total Net Income attributable to Xylem 169 226 395 Net Income margin 8.2 % 9.8 % N/A N/A 9.0 % Depreciation 68 69 137 Amortization 77 76 153 Interest Expense (Income), net - 3 3 Income Tax Expense 50 75 125 EBITDA 364 449 - - 813 Share-based Compensation 12 13 25 Restructuring & Realignment 27 29 56 Special Charges 12 13 25 Loss/(Gain) from sale of business 10 - 10 Loss attributable to non-controlling interest (2 ) (2 ) (4 ) Adjusted EBITDA 423 502 - - 925 Revenue 2,069 2,301 4,370 Adjusted EBITDA Margin 20.4 % 21.8 % N/A N/A 21.2 % 2024 Q1 Q2 Q3 Q4 Total Net Income 153 194 217 326 890 Net Income margin 7.5 % 8.9 % 10.3 % 14.5 % 10.4 % Depreciation 61 62 68 67 258 Amortization 73 83 73 75 304 Interest Expense (Income), net 7 6 5 (2 ) 16 Income Tax Expense 43 53 52 49 197 EBITDA 337 398 415 515 1,665 Share-based Compensation 18 13 12 13 56 Restructuring & Realignment 15 29 11 36 91 Special Charges 16 13 7 21 57 Gain on joint venture remeasurement - - - (152 ) (152 ) Loss/(Gain) from sale of business 5 (1 ) 2 40 46 Adjusted EBITDA 391 452 447 473 1,763 Revenue 2,033 2,169 2,104 2,256 8,562 Adjusted EBITDA Margin 19.2 % 20.8 % 21.2 % 21.0 % 20.6 % Expand
Yahoo
13-05-2025
- Business
- Yahoo
XYL Q1 Earnings Call: Xylem Lifts Revenue Outlook Amid Tariff Pressures and Operational Restructuring
Water technology company Xylem (NYSE:XYL) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 1.8% year on year to $2.07 billion. The company expects the full year's revenue to be around $8.75 billion, close to analysts' estimates. Its non-GAAP profit of $1.03 per share was 7.9% above analysts' consensus estimates. Is now the time to buy XYL? Find out in our full research report (it's free). Revenue: $2.07 billion vs analyst estimates of $2.04 billion (1.8% year-on-year growth, 1.5% beat) Adjusted EPS: $1.03 vs analyst estimates of $0.95 (7.9% beat) Adjusted EBITDA: $470 million vs analyst estimates of $403.7 million (22.7% margin, 16.4% beat) The company lifted its revenue guidance for the full year to $8.75 billion at the midpoint from $8.65 billion, a 1.2% increase Management reiterated its full-year Adjusted EPS guidance of $4.60 at the midpoint Operating Margin: 11.2%, in line with the same quarter last year Free Cash Flow was -$38 million, down from $15 million in the same quarter last year Organic Revenue rose 3.3% year on year (7.1% in the same quarter last year) Market Capitalization: $30.97 billion Xylem's first quarter results reflected broad-based demand across its business segments, with management attributing performance to operational discipline, simplification initiatives, and continued progress in integrating recent acquisitions. CEO Matthew Pine underscored that the company's diversified water solutions portfolio and exposure to stable customer operating budgets helped Xylem navigate ongoing volatility, while productivity gains and targeted pricing actions offset inflation and mix challenges. Pine stated, "We are leaning into our high-impact culture, simplifying processes and systems, and reorienting our structure to improve customer focus." Looking ahead, Xylem's leadership maintained its full-year earnings outlook and lifted its revenue guidance, citing a strong backlog, the effects of recent price increases, and anticipated benefits from ongoing restructuring. However, management also acknowledged uncertainty around tariffs and potential softening in demand later this year. CFO Bill Grogan explained, "We have pricing and supply chain programs in place designed to offset the majority of the impacts from the current tariff scheme," but noted that the ultimate demand response remains a key variable for the coming quarters. Management highlighted that the first quarter's results were shaped by pricing discipline, productivity initiatives, and continued organizational changes. Several key business trends and market developments were discussed: Pricing Strategies Offset Headwinds: Leadership attributed margin stability and revenue gains to swift implementation of both price increases and surcharges across the portfolio, mitigating inflation and tariff impacts. Organizational Simplification Progress: The ongoing restructuring—moving to a more focused divisional model and streamlining management—was identified as a factor in improved productivity and customer responsiveness. Management reported that decision-making speed and focus had already improved across global teams. Evoqua Integration Momentum: The integration of Evoqua, acquired in 2023, continues to deliver cost synergies ahead of plan and is now beginning to generate revenue synergies, particularly in industrial verticals like microelectronics and energy. Tariff Mitigation Measures: Management detailed actions such as dual sourcing and reducing exposure to Chinese imports, alongside leveraging trade agreements like USMCA, to manage the incremental cost from tariffs. Pricing actions are expected to continue adapting to changes in the trade environment. Segment-Specific Trends: Measurement & Control Solutions (MCS) saw mixed results due to energy/water mix, with management noting near-term margin pressure but expected normalization in the second half. Orders in Applied Water and Water Infrastructure were supported by building solutions and treatment demand, respectively, except for ongoing weakness in China. Xylem's outlook for the year is shaped by expectations of continued demand resilience, execution of restructuring initiatives, and the uncertain effects of tariffs on pricing and end-market demand. Tariff and Pricing Dynamics: Management expects ongoing tariffs to be manageable through further price actions and supply chain adjustments, but acknowledged some risk of demand softening in the second half of the year as higher prices work through the system. Operational Restructuring Benefits: The simplification of Xylem's operating model is anticipated to yield further productivity gains and margin improvements, especially as segment leaders gain greater accountability and decision-making power. M&A and Portfolio Optimization: Continued integration of acquisitions, such as Evoqua, and potential divestitures of non-core assets are expected to enhance Xylem's focus on advanced treatment and intelligent solutions, supporting both growth and profitability goals. Deane Dray (RBC Capital Markets): Asked whether Xylem or its customers were prepositioning inventory ahead of tariffs and about assumptions for price elasticity; management replied there was minimal inventory pull-forward and that some demand decline is expected but is manageable. Mike Halloran (Baird): Inquired about the mechanics and timing of price increases and surcharges, and their impact on the second quarter; CEO Pine explained that actions were already in place with effects skewed to the back half of the year. Scott Davis (Melius Research): Questioned whether the current environment accelerates Xylem's M&A strategy and portfolio optimization; Pine confirmed active M&A pursuits and ongoing divestitures of non-core assets, emphasizing strategic fit and financial discipline. Nathan Jones (Stifel): Asked how tariffs influence Xylem's competitive positioning and the impact of organizational realignment; management cited portfolio diversification and a new divisional structure as key strengths in facing economic and competitive pressures. Sara Borodinski (Jefferies): Sought clarity on the trajectory of Measurement & Control Solutions margins and order growth; CFO Grogan indicated that margin pressure from mix would bottom in the second quarter and improve sequentially, with order activity expected to normalize in the second half. Looking forward, the StockStory team will closely monitor (1) the extent to which Xylem's price increases affect customer demand, particularly in the second half of the year as tariff impacts flow through, (2) the pace and effectiveness of operational restructuring and integration of Evoqua, and (3) order trends in Measurement & Control Solutions and Water Infrastructure segments. Developments in global trade policy and the company's ability to execute on M&A and portfolio optimization will also be important to track. Xylem currently trades at a forward P/E ratio of 26.7×. In the wake of earnings, is it a buy or sell? Find out in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
13-05-2025
- Business
- Yahoo
Spotting Winners: Xylem (NYSE:XYL) And Water Infrastructure Stocks In Q1
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let's take a look at how water infrastructure stocks fared in Q1, starting with Xylem (NYSE:XYL). Trends towards conservation and reducing groundwater depletion are putting water infrastructure and treatment products front and center. Companies that can innovate and create solutions–especially automated or connected solutions–to address these thematic trends will create incremental demand and speed up replacement cycles. On the other hand, water infrastructure and treatment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies' offerings. The 5 water infrastructure stocks we track reported a mixed Q1. As a group, revenues missed analysts' consensus estimates by 11.8%. In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results. Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector. Xylem reported revenues of $2.07 billion, up 1.8% year on year. This print exceeded analysts' expectations by 1.5%. Overall, it was a very strong quarter for the company with a solid beat of analysts' EBITDA estimates. "The team's first-quarter results exceeded expectations, continuing our momentum and delivering a strong start to 2025,' said Matthew Pine, Xylem's president and CEO. The stock is up 10% since reporting and currently trades at $127.30. Is now the time to buy Xylem? Access our full analysis of the earnings results here, it's free. Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally. Watts Water Technologies reported revenues of $558 million, down 2.3% year on year, outperforming analysts' expectations by 1.9%. The business had an exceptional quarter with a solid beat of analysts' EBITDA estimates. The market seems happy with the results as the stock is up 16.2% since reporting. It currently trades at $245.88. Is now the time to buy Watts Water Technologies? Access our full analysis of the earnings results here, it's free. Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ:ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors. Energy Recovery reported revenues of $8.07 million, down 33.3% year on year, falling short of analysts' expectations by 63.3%. It was a disappointing quarter as it posted a significant miss of analysts' EBITDA and EPS estimates. Energy Recovery delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 18.6% since the results and currently trades at $12.24. Read our full analysis of Energy Recovery's results here. As one of the oldest companies in the water infrastructure industry, Mueller (NYSE:MWA) is a provider of water infrastructure products and flow control systems for various sectors. Mueller Water Products reported revenues of $364.3 million, up 3.1% year on year. This result surpassed analysts' expectations by 2.9%. It was a very strong quarter as it also logged an impressive beat of analysts' organic revenue estimates and a solid beat of analysts' EBITDA estimates. Mueller Water Products achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 6.1% since reporting and currently trades at $25.40. Read our full, actionable report on Mueller Water Products here, it's free. As the world's largest manufacturer of autonomous mobile robots, Tennant (NYSE:TNC) designs, manufactures, and sells cleaning products to various sectors. Tennant reported revenues of $290 million, down 6.8% year on year. This number lagged analysts' expectations by 2.2%. It was a softer quarter as it also produced a significant miss of analysts' EBITDA and EPS estimates. Tennant had the weakest full-year guidance update among its peers. The stock is up 5.6% since reporting and currently trades at $76.12. Read our full, actionable report on Tennant here, it's free. The Fed's interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump's presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. 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