Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5979
    -0.0027 (-0.44%)
     
  • NZD/EUR

    0.5537
    -0.0006 (-0.10%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.09
    +1.74 (+2.14%)
     
  • GOLD

    2,242.50
    +29.80 (+1.35%)
     
  • NASDAQ

    18,252.60
    -28.24 (-0.15%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,789.27
    +29.19 (+0.07%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • NZD/JPY

    90.4740
    -0.3060 (-0.34%)
     

Xylem (XYL) Beats on Q4 Earnings & Revenues, Hikes Dividend

Xylem Inc.’s XYL fourth-quarter 2022 adjusted earnings (excluding 10 cents from non-recurring items) of 92 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line increased 46% year over year.

Xylem’s revenues of $1,506 million also outperformed the Zacks Consensus Estimate of $1,415 million and rose 13.8% year over year. Organic sales in the quarter rose 20%.

Orders in the reported quarter decreased 9% year over year. Organically, orders decreased by 3% owing to currency differences.

Xylem Inc. Price, Consensus and EPS Surprise

 

Xylem Inc. Price, Consensus and EPS Surprise
Xylem Inc. Price, Consensus and EPS Surprise

Xylem Inc. price-consensus-eps-surprise-chart | Xylem Inc. Quote

 

Segmental Details

Revenues in the Water Infrastructure segment were $668 million, up 7% year over year. Organic sales in the reported quarter grew 15% year over year, buoyed by effective price realization, healthy activity in the utility business in the United States and Western Europe and dewatering demand in emerging markets.

The Applied Water segment generated revenues of $455 million in the fourth quarter, up 12% year over year. Organic sales increased 17% on a year-over-year basis. The segmental performance benefited from strong price realization in all end markets and regions.

Quarterly revenues at the Measurement & Control Solutions segment were $383 million, up 30% year over year. Organic sales were up 35% year over year due to strength in the water quality test and pipeline assessment applications as well as improved chip supply.

Margin Profile

In the reported quarter, Xylem’s adjusted EBITDA was $281 million, up 31.3% from the year-ago quarter’s level. The margin in the quarter improved to 18.7% compared with 16.2% in the year-ago period.

Adjusted operating income was $214 million in the quarter under review, up 46% year over year. Adjusted operating margin increased to 14.2% in the fourth quarter of 2022 from 121.1% in the year-ago quarter.

Balance Sheet and Cash Flow

Exiting the fourth quarter, Xylem had cash and cash equivalents of $944 million compared with $1,349 million at the end of December 2021. Long-term debt (net) was $1,880 million at the end of the fourth quarter of 2022 compared with $2,440 million at the end of December 2021.

In 2022, Xylem generated net cash of $596 million from operating activities compared with $538 million in the year-ago period. Capital expenditure was $208 million, flat year over year. Free cash flow was $388 million in 2022 compared with $330 million in the year-ago quarter.

Shareholder-Friendly Policies

In 2022, Xylem paid out dividends worth $217 million, reflecting an increase of 6.9% year over year. The company also bought back shares worth $52 million in the same period, down 23.5% year over year.

Dividend Hike

Xylem’s board announced a dividend hike of 10% to 33 cents per share (annually: $1.32). The first installment of the dividend is payable to shareholders on Mar 22, of record as of Feb 22.

2023 Outlook

For 2023, Xylem, carrying a Zacks Rank #3 (Hold), expects revenues of $5.70-$5.80 billion, reflecting an increase of 3-5% on a reported basis and 4-6 % on an organic basis. The Zacks Consensus Estimate for the same stands at $5.86 billion.

Adjusted EBITDA margin is predicted to be in the range of 17.5-18%, reflecting an increase of 50-100 basis points year over year. Adjusted earnings per share are expected in the band of $3.00-$3.25, indicating a rise of 5-14% from the 2022 reported number. The mid-point of the guided range — $3.13 — lies below the Zacks Consensus Estimate of $3.19.  Free cash flow conversion to net income is estimated to be 100%.

Performance of Other Industrial Stocks

Parker-Hannifin Corporation PH, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding $1.72 from non-recurring items) of $4.76 per share, which surpassed the Zacks Consensus Estimate of $4.45. The bottom line improved 6.7% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.

Parker-Hannifin’s total revenues of $4,674.8 million also outperformed the Zacks Consensus Estimate of $4,461.5 million. The top line jumped 22.2% year over year. Organic sales for the quarter increased 10.3% year over year. Orders were up 3% year over year.

Johnson Controls International JCI, carrying a Zacks Rank #3, reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings of 67 cents per share, which surpassed the Zacks Consensus Estimate of 66 cents. The bottom line increased 24.1% year over year.

Johnson Controls’ total revenues of $6,068 million missed the Zacks Consensus Estimate of $6,263.8 million. The top line increased 3.5% year over year.

Berry Global Group BERY, carrying a Zacks Rank #3, reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding 45 cents from non-recurring items) of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line increased 4% year over year due to lower costs.

Berry Global’s net sales of $3,060 million missed the Zacks Consensus Estimate of $3,303.2 million. The top line decreased 14.4% year over year due to a 6% decline in volumes, a 4% decrease in selling prices and a 3% impact from foreign currency headwind.

ADVERTISEMENT

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Johnson Controls International plc (JCI) : Free Stock Analysis Report

Parker-Hannifin Corporation (PH) : Free Stock Analysis Report

Berry Global Group, Inc. (BERY) : Free Stock Analysis Report

Xylem Inc. (XYL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research