Xylem (NYSE: XYL) reported Q4 EPS of $0.81, $0.13 better than the analyst estimate of $0.68. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.29 billion.

• Operational performance exceeds expectations on top and bottom line; quarter sequential gains across all segments and end markets
• Fourth quarter and full-year revenue of $1.37 billion and $4.88 billion, respectively
• Fourth quarter 2020 reported net income of $148 million or $0.82 per share; adjusted net income of $145 million or $0.81 per share
• Full-year 2020 reported net income of $254 million or $1.40 per share; adjusted full-year net income of $374 million or $2.06 per share
• Strong full-year cash performance of 324% operating cash flow conversion and 181% free cash flow conversion
• Announces 8% increase in cash dividend, representing the Company’s 10th consecutive annual dividend increase
• Provides 2021 organic revenue growth guidance range of 3% to 5% and adjusted earnings per share range of $2.35 to $2.60

“Our team again delivered solid operational performance, exceeding expectations across all major indicators, including revenue, margin, and EPS,” said Patrick Decker, president and CEO of Xylem. “We drove better-than-anticipated top-line improvements in all segments, taking full advantage of stabilizing demand, demonstrated by sequential gains globally, and with particularly strong performance in Europe and China. Our improved bottom-line performance reflects effective cost containment and supply chain execution through the pandemic, and over-delivery on our free cash flow conversion commitments on the back of disciplined working capital management.”

“That performance gives us positive momentum entering 2021,” Decker continued, “as our end markets showed encouraging signs of recovery in the fourth quarter, with healthy orders trends and significant backlog growth. We also delivered strong performance with our industry-leading digital portfolio, as the pandemic continues to accelerate customer adoption of digital technologies across the water sector. This clearly positions Xylem well in both the near and long term.”

GUIDANCE:

Xylem sees FY2021 EPS of $2.35-$2.60, versus the consensus of $2.65. Xylem sees FY2021 revenue of $5.16-5.26 billion, versus the consensus of $5.13 billion.

• Xylem forecasts full-year 2021 revenue in the range of $5.16 to $5.26 billion, up 6 to 8 percent on a reported basis and up 3 to 5 percent on an organic basis.
• Full-year 2021 adjusted EBITDA margin is expected to be in the range of 16.7 to 17.7 percent and adjusted operating margin is expected to be in the range of 11.5 to 12.5 percent. This results in adjusted earnings per share of $2.35 to $2.60, which represents an increase of 14 to 26 percent from Xylem’s 2020 adjusted results. The Company’s adjusted earnings outlook excludes projected restructuring and realignment costs of approximately $50 to $60 million for the year. Further 2021 planning assumptions are included in Xylem’s fourth quarter 2020 earnings materials posted at www.xylem.com/investors. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort.

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