Xylem (XYL) Misses Q1 EPS by 14c, Revenues Miss

Xylem (NYSE: XYL) reported Q1 EPS of $0.23, $0.14 worse than the analyst estimate of $0.37. Revenue for the quarter came in at $1.12 billion versus the consensus estimate of $1.15 billion.

• Reported net income of $38 million or $0.21 per share; adjusted net income of $42 million or $0.23 per share
• Organic revenue declined 8% in the first quarter, impacted by COVID-19; declined 9% on a reported basis
• Maintaining strong balance sheet, ~$1.7 billion of available liquidity

“From the time COVID-19 emerged, we have been supporting our customers as they deliver essential water and sanitation services at the heart of disease prevention and control,” said Patrick Decker, Xylem’s president and CEO. “Around the world, our team has done an outstanding job shoring up our supply chain to ensure the continuity of essential services in their communities.”

“We are serving utilities’ mission-critical applications from a position of financial strength, and have maintained robust liquidity while also taking early action to reduce spending,” continued Decker. “Now, we are re-shaping our cost profile and re-focusing our investments on the capabilities that will maximize our and our customers’ resilience as we emerge from this pandemic. These actions will enhance our competitiveness, and further differentiate our portfolio of products and solutions, positioning Xylem to out-perform over the medium and long term."

Outlook

Xylem withdrew 2020 guidance on March 31, 2020 due to the uncertainties caused by COVID-19. Xylem is not yet reinstating full-year guidance, but is providing organic revenue outlook for the second quarter to be down 20 to 30 percent driven by the impact of COVID-19. To mitigate the impact of anticipated COVID-19 related volume declines, Xylem identified approximately $100 million in immediate spending reductions for the year. The Company plans to take further permanent structural actions to re-shape its cost profile and reprioritize its investments around the capabilities that will enable its customers to be more resilient emerging from the COVID-19 crisis.

For earnings history and earnings-related data on Xylem (XYL) click here.

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