WASHINGTON, D.C. - Xylem Inc. (NYSE:XYL), a leading global water technology company, reported its second-quarter earnings, beating analyst expectations with an adjusted EPS of $1.09, which was $0.04 higher than the consensus estimate of $1.05.
The company's revenue reached $2.2 billion, exceeding the $2.14 billion estimate and marking a significant 26% increase from the same quarter last year.
President and CEO Matthew Pine attributed the strong quarterly performance to robust demand and disciplined operational execution, which led to considerable margin expansion. He noted that the integration of Evoqua and related synergies are progressing well. Xylem's net income rose to $194 million, with a net income margin increase of 360 basis points to 8.9%.
In light of these results, Xylem has raised its full-year revenue guidance to $8.55 billion, reflecting an approximately 16% increase, with organic growth anticipated to be between 5% and 6%.
Adjusted full-year EPS guidance has also been lifted to a range of $4.18 to $4.28, up from the previous forecast of $4.10 to $4.25. The company's stock responded positively to the news, rising about 2% in pre-open trade.
Xylem's second-quarter success was driven by productivity savings, volume, and price, which collectively offset the impacts of inflation, strategic investments, and mix. The adjusted EBITDA margin for the quarter stood at 20.8%, a year-over-year improvement of 170 basis points.
Looking ahead, Xylem now expects a full-year 2024 adjusted EBITDA margin of approximately 20.5%, an increase from the previously guided 20.0%. The company also anticipates a free cash flow conversion to net income of at least 120%, exceeding the prior guidance of 115%.
CEO Pine expressed confidence in the team's ability to realize operational potential and meet global demand amid intensifying water challenges. He remarked, "Our diversified portfolio of mission-critical solutions is ideally positioned to meet global demand from intensifying water challenges."
Xylem's financial results and optimistic guidance reflect the company's robust position in the water technology industry and its ability to navigate through potential macroeconomic variability in the latter half of the year.
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