Xylem Inc (XYL) Reports Q3 2023 Earnings: Revenue Up 50%, EPS Rises 800%
Q3 2023 revenue of $2.1 billion, a 50% increase on a reported basis and 10% organically.
Earnings per share (EPS) of $0.63, up 800%; adjusted EPS of $0.99, up 14%.
Full-year revenue guidance raised to approximately $7.3B, up 32% from 30%, with expected organic revenue growth of 11%, up from 9% to 10%.
Full-year adjusted EPS guidance lifted to $3.71 to $3.73, from $3.50 to $3.70.
On October 31, 2023, Xylem Inc (NYSE:XYL), a leading global water technology company, reported its third-quarter results. The company's total revenue was $2.1 billion, with reported growth of 50 percent and organic growth of 10 percent, surpassing prior guidance. This robust growth was driven by strong commercial and operational execution and resilient demand. The company's net income was $152 million, or $0.63 per share, a significant increase from the previous year.
Financial Highlights
Xylem Inc (NYSE:XYL) reported a net income margin increase of 640 basis points to 7.3 percent. This was driven by lapping a prior-year one-time pension settlement and strong operational performance, partially offset by higher acquisition and integration costs related to the Evoqua transaction, higher purchase accounting intangible amortization, and higher restructuring and realignment costs. Adjusted net income was $240 million, or $0.99 per share, which excludes the impacts of special charges, purchase accounting intangible amortization, and restructuring and realignment costs.
The company's third-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 19.8 percent, reflecting a year-over-year increase of 150 basis points. Excluding Evoquas results, adjusted EBITDA margin was 18.9 percent, up 60 basis points over the prior year period.
Outlook
Xylem now expects full-year 2023 revenue of approximately $7.3 billion, up approximately 32 percent on a reported basis and up approximately 11 percent on an organic basis. This represents an increase from the Companys previous full-year guidance of 30 percent on a reported basis and 9 to 10 percent on an organic basis.
Full-year 2023 adjusted EBITDA margin is expected to be approximately 19 percent, lifted from the previous guide of approximately 18 percent. This results in adjusted earnings per share of $3.71 to $3.73, raised from the previous range of $3.50 to $3.70.
Segment Results
The Measurement & Control Solutions segment reported a 26% increase in revenue, while the Water Infrastructure segment saw a 40% increase. The Applied Water segment reported a 2% increase in revenue, and the Integrated Solutions & Services segment reported a revenue of $368 million.
Overall, Xylem Inc (NYSE:XYL) has demonstrated strong performance in Q3 2023, surpassing prior guidance and showing robust growth across all segments. The company's revised full-year guidance reflects its confidence in continued strong performance.
Explore the complete 8-K earnings release (here) from Xylem Inc for further details.
This article first appeared on GuruFocus.
