Xylem's Q3 Earnings Meet Estimates, Revenues Miss, Orders Up Y/Y

Core Insights - Xylem Inc. reported third-quarter 2024 adjusted earnings of $1.11 per share, meeting the Zacks Consensus Estimate, with a year-over-year increase of 12% [1] - Revenues for the quarter were $2.10 billion, missing the consensus estimate of $2.18 billion, but reflecting a 1% year-over-year growth driven by solid orders across all segments [1][2] Revenue Breakdown - Water Infrastructure segment revenues were $623 million, up 2% year over year, with organic sales increasing by 1% [3] - Applied Water segment revenues totaled $447 million, down 4% year over year, with organic sales also falling by 4% due to geographic softness [4] - Measurement & Control Solutions segment revenues reached $458 million, up 11% year over year, driven by demand for smart metering [4] - Water Solutions and Services segment revenues were $576 million, down 2% year over year, with organic sales decreasing by 1% due to capital project timing [5] Margin and Profitability - Adjusted EBITDA was $447 million, an 8.7% increase from the previous year, with a margin improvement to 21.2% from 19.8% [6] - Adjusted operating income rose to $350 million, up 11.1% year over year, with an adjusted operating margin increasing to 16.6% from 15.2% [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the third quarter were $989 million, down from $1.02 billion at the end of December 2023; long-term debt decreased to $1.98 billion from $2.3 billion [7] - Net cash generated from operating activities in the first nine months of 2024 was $688 million, compared to $382 million in the same period last year [7] Capital Expenditure and Shareholder Returns - Capital expenditure was $221 million, a 24.9% increase from the previous year [8] - Dividends paid in the first nine months of 2024 totaled $263 million, up 20.1% year over year, with share buybacks amounting to $19 million compared to $10 million in the prior year [9] 2024 Guidance - Xylem expects revenues of approximately $8.5 billion for 2024, indicating a 15% increase from the prior year on a reported basis and around 5% on an organic basis [11] - Adjusted EBITDA margin is projected to be approximately 20.5%, reflecting an expansion of 160 basis points from the previous year [11] - Adjusted earnings are forecasted to be in the range of $4.22-$4.24 per share, up from $3.78 per share in 2023 [12]