We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Xylem (XYL) Posts In-Line Q1 Earnings, Lifts '17 EPS Outlook
Read MoreHide Full Article
Premium water solutions provider, Xylem Inc. (XYL - Free Report) reported in-line earnings for first-quarter 2017.
Over the last two years, shares of this Zacks Rank #3 (Hold) stock yielded a return of 39.08%, outperforming 21.78% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Earnings
Quarterly adjusted earnings came in at 39 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line came higher than the year-ago tally of 35 cents per share.
Revenues
Quarterly revenues were $1,071 million, up 26.4% year over year. In addition, the top line handily beat the Zacks Consensus Estimate of $1,061 million.
Margins and Costs
Xylem’s cost of revenues for the reported quarter came in at $659 million, up 27.2% year over year. Selling, general and administrative expenses came in at $272 million compared to $219 million recorded in the year-ago period. Research and development expenses were $42 million, as against $25 million reported in the prior-year quarter.
Gross profit margin during the quarter was 38.5%, down 30 basis points (bps) year over year. Quarterly adjusted operating margin was 10.5%, down 40 basis points (bps) year over year.
Segmental Details
The Water Infrastructure segment generated revenues of $496 million as against $514 million recorded in the comparable period last year.
Revenues from the Applied Water segment totaled $333 million, flat year over year.
The company’s recently formed Sensus business segment generated revenues worth $242 million in the reported quarter.
Balance Sheet and Cash Flow
Xylem exited first-quarter 2017 with cash and cash equivalents of $287 million compared with $308 million as of Dec 31, 2016. Long-term debt was $2,126 million, as against $2,108 million recorded at the end of 2016.
In the first quarter, Xylem generated cash of $52 million from operating activities compared with $41 million recorded in the prior-year quarter. Capital expenditure came in at $43 million as against $37 million incurred in the year-ago quarter.
Outlook
Xylem is poised to grow on the back of strong public utility and health sector trade, the Sensus business buyout, as well as increasing demand from emerging markets. Based on these positives, the company raised its full-year 2017 adjusted earnings guidance to the $2.23–$2.38 per share range, higher than the previously estimated range of $2.20–$2.35 per share. However, the company reaffirmed its previous revenue guidance in the band of $4.5–$4.6 billion.
Stocks to Consider
Better-ranked stocks within the industry are listed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) , which currently flaunts a Zacks Rank #1, generated an average earnings surprise of 9.78% over the last four quarters.
Avery Dennison Corporation (AVY - Free Report) holds a Zacks Rank #2 and has an average earnings surprise of 5.53% for the past quarters.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course. Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Xylem (XYL) Posts In-Line Q1 Earnings, Lifts '17 EPS Outlook
Premium water solutions provider, Xylem Inc. (XYL - Free Report) reported in-line earnings for first-quarter 2017.
Over the last two years, shares of this Zacks Rank #3 (Hold) stock yielded a return of 39.08%, outperforming 21.78% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Earnings
Quarterly adjusted earnings came in at 39 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line came higher than the year-ago tally of 35 cents per share.
Revenues
Quarterly revenues were $1,071 million, up 26.4% year over year. In addition, the top line handily beat the Zacks Consensus Estimate of $1,061 million.
Margins and Costs
Xylem’s cost of revenues for the reported quarter came in at $659 million, up 27.2% year over year. Selling, general and administrative expenses came in at $272 million compared to $219 million recorded in the year-ago period. Research and development expenses were $42 million, as against $25 million reported in the prior-year quarter.
Gross profit margin during the quarter was 38.5%, down 30 basis points (bps) year over year. Quarterly adjusted operating margin was 10.5%, down 40 basis points (bps) year over year.
Segmental Details
The Water Infrastructure segment generated revenues of $496 million as against $514 million recorded in the comparable period last year.
Revenues from the Applied Water segment totaled $333 million, flat year over year.
The company’s recently formed Sensus business segment generated revenues worth $242 million in the reported quarter.
Balance Sheet and Cash Flow
Xylem exited first-quarter 2017 with cash and cash equivalents of $287 million compared with $308 million as of Dec 31, 2016. Long-term debt was $2,126 million, as against $2,108 million recorded at the end of 2016.
In the first quarter, Xylem generated cash of $52 million from operating activities compared with $41 million recorded in the prior-year quarter. Capital expenditure came in at $43 million as against $37 million incurred in the year-ago quarter.
Outlook
Xylem is poised to grow on the back of strong public utility and health sector trade, the Sensus business buyout, as well as increasing demand from emerging markets. Based on these positives, the company raised its full-year 2017 adjusted earnings guidance to the $2.23–$2.38 per share range, higher than the previously estimated range of $2.20–$2.35 per share. However, the company reaffirmed its previous revenue guidance in the band of $4.5–$4.6 billion.
Stocks to Consider
Better-ranked stocks within the industry are listed below:
Caterpillar Inc. (CAT - Free Report) has a positive average earnings surprise of 40.25% for the trailing four quarters and boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) , which currently flaunts a Zacks Rank #1, generated an average earnings surprise of 9.78% over the last four quarters.
Avery Dennison Corporation (AVY - Free Report) holds a Zacks Rank #2 and has an average earnings surprise of 5.53% for the past quarters.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>