RYE BROOK, N.Y.--(BUSINESS WIRE)--
Xylem Inc. (
XYL), a leading global water technology company
dedicated to solving the world’s most challenging water issues,
today reported second quarter 2015 net income of $74 million, or
$0.41 per share. Excluding restructuring and realignment charges
and other special items, adjusted net income was $78 million or
$0.43 per share, down 10 percent from the comparable period in
2014, but up two percent excluding the impact of foreign exchange
translation. Second quarter revenue was $920 million, an increase
of one percent organically, reflecting strength in the commercial
and public utility end-markets. Second quarter operating margin was
11.3 percent, down 20 basis points from the prior year. Adjusted
operating margin was 12.0 percent, flat year-over-year excluding
the 40-basis-point impact of foreign exchange translation. This
result reflects volume leverage and lower expenses offset by
inflation, the divestiture of a business and unfavorable mix.
“Xylem again delivered solid results that met our earnings
expectations, despite challenging market conditions,” said Patrick
Decker, Xylem President and Chief Executive Officer. “I’m pleased
with our team’s performance in this environment, particularly their
strong execution. This is an area on which we will continue to
focus, as well as driving our initiatives to accelerate growth and
maintaining strong cost discipline.”
Decker continued, “While we continue to manage near-term
headwinds, particularly in the industrial sector, there are signs
of improving conditions in other key end-markets. In the second
quarter, we delivered impressive growth in backlog that is
shippable in 2016 and beyond – an encouraging indicator of growing
demand. These factors contribute to an increasingly optimistic
long-term outlook for our business.”
Full-year 2015 Outlook
Xylem is narrowing the range of its full-year outlook, which
continues to reflect ongoing foreign exchange fluctuations. Xylem
continues to expect full-year 2015 revenue of approximately $3.7
billion, a decrease of six to seven percent from the full-year 2014
results. On an organic basis, Xylem now expects to generate revenue
growth of approximately one to two percent.
Full-year 2015 adjusted operating income is now expected to be
in the range of $470 million to $483 million, resulting in adjusted
earnings per share of $1.82 to $1.87. Excluding the projected
unfavorable impact of foreign exchange translation, Xylem’s
adjusted earnings per share growth expectations are in the range of
six to seven percent over the comparable full-year 2014 results.
The Company’s outlook for projected restructuring and realignment
costs of $20 million for the year is unchanged.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its businesses
serving clean water delivery, wastewater transport and treatment,
dewatering and analytical instrumentation.
Second quarter 2015 Water Infrastructure revenue was $551
million, flat relative to the prior year period on an organic
basis. Growth in the public utility and industrial sectors in
Europe and Australia was offset primarily by declines in
dewatering, particularly in the oil and gas market.
Second quarter adjusted segment operating income was $69
million, down $12 million from the prior year result, reflecting
the unfavorable impact of foreign exchange translation. Operating
income for the quarter was $65 million, down $11 million from last
year. Adjusted operating margin for the quarter decreased 30 basis
points to 12.8 percent, excluding the 30-basis-point impact of
foreign exchange translation. Strengthening execution and solid
cost reductions were more than offset by inflation and unfavorable
mix, as well as increased investment in growth initiatives.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of
businesses in residential and commercial building services, and
industrial and agricultural applications.
Second quarter 2015 revenue was $369 million, an increase of
three percent organically compared with the second quarter 2014.
This increase was driven by strong organic growth in the commercial
and industrial sectors, which resulted in double-digit growth in
emerging markets. Growth in the U.S. commercial end-market was
offset by declines in industrial water applications in the
region.
Adjusted segment operating income was $53 million in the second
quarter, down $4 million from the comparable period last year.
Operating income was $51 million, which was $2 million lower than
last year. The impact of productivity actions, cost reductions and
volume growth helped to drive a 10-basis-point increase in the
adjusted operating margin for the segment to 14.8 percent,
excluding the 40-basis-point impact of foreign exchange
translation.
Supplemental information on Xylem’s second quarter earnings and
reconciliations for non-GAAP items are posted at
http://investors.xyleminc.com.
About Xylem
Xylem (XYL) is a leading global water technology provider,
enabling customers to transport, treat, test and efficiently use
water in public utility, residential and commercial building
services, industrial and agricultural settings. The Company does
business in more than 150 countries through a number of
market-leading product brands, and its people bring broad
applications expertise with a strong focus on finding local
solutions to the world’s most challenging water and wastewater
problems. Xylem is headquartered in Rye Brook, New York, with 2014
revenues of $3.9 billion and approximately 12,500 employees
worldwide. Xylem was named to the Dow Jones Sustainability Index
for the last three years for advancing sustainable business
practices and solutions worldwide.
The name Xylem is derived from classical Greek and is the tissue
that transports water in plants, highlighting the engineering
efficiency of our water-centric business by linking it with the
best water transportation of all – that which occurs in nature. For
more information, please visit us at
www.xylem.com.
Forward-Looking Statements
This press release contains information that may constitute
“forward-looking statements" within the meaning of the Private
Securities Litigation Act of 1995. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain. Generally, the words “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “forecast,” “believe,” “target,”
“will,” “could,” “would,” “should” and similar expressions identify
forward-looking statements, which generally are not historical in
nature. However, the absence of these words or similar expressions
does not mean that a statement is not forward-looking. These
forward-looking statements include statements about the
capitalization of the Company, the Company’s restructuring and
realignment, future strategic plans and other statements that
describe the Company’s business strategy, outlook, objectives,
plans, intentions or goals. All statements that address operating
or financial performance, events or developments that we expect or
anticipate will occur in the future - including statements relating
to orders, revenue, operating margins and earnings per share
growth, and statements expressing general views about future
operating results - are forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
important factors that could cause actual results to differ
materially from those expressed or implied in, or reasonably
inferred from, such forward-looking statements.
Factors that could cause results to differ materially from those
anticipated include: economic, political and other risks associated
with our international operations, including military actions,
economic sanctions or trade embargoes that could affect customer
markets, and non-compliance with laws, including foreign corrupt
practice laws, export and import laws and competition laws;
potential for unexpected cancellations or delays of customer orders
in our...
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