Xylem (NYSE: XYL) reported Q2 EPS of $0.40, $0.01 better than the analyst estimate of $0.39. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.1 billion.

• Reported net income of $31 million or $0.17 per share; adjusted net income of $73 million or $0.40 per share
• Revenue declined 14% on a reported basis, and 12% organically, impacted by COVID-19
• Strong cash performance with free cash flow of $137 million, up 117%; and operating cash flow of $181 million, up 47%

“The quick action from our teams in the first and second quarters allowed us to adapt swiftly, and positioned us well to mitigate the near-term impacts of the pandemic,” said Patrick Decker, Xylem’s president and CEO. “Our financial and supply chain strengths have enabled us to stand behind our customers and the essential services they have been delivering during the pandemic to the communities we all serve.”

“Clearly, there are still near-term market challenges and macro uncertainty. That said, we are optimistic on the basis of modestly improving trajectories in some of our key markets,” continued Decker. “We’ve delivered significant commercial momentum alongside very strong cash performance. And we are well positioned both to be resilient in a range of short-term scenarios, and to capitalize on the market’s recovery over the longer term.”

Outlook

Xylem withdrew 2020 guidance earlier this year due to the uncertainties caused by COVID-19. The Company is not reinstating full-year guidance, but is providing a framework for the third quarter which includes expectation that organic revenue will be down in the range of 8 to 12 percent – down 10 to 14 percent on a reported basis – and adjusted operating margin will be in the range of 11.0 percent to 11.5 percent. This represents sequential improvement in both organic revenue and adjusted operating margin from the second quarter to the third quarter.

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