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Xylem downgrades full-year earnings guidance

New York-based water technology and equipment company Xylem has lowered its full year sales and earnings guidance on the back of “notable weakening in industrial and commercial end-markets” after marginally lifting September quarter revenues versus 2018, and booking US$3.878 billion revenues for the first nine months of 2019, up 1.5% year-on-year.
Xylem downgrades full-year earnings guidance Xylem downgrades full-year earnings guidance Xylem downgrades full-year earnings guidance Xylem downgrades full-year earnings guidance Xylem downgrades full-year earnings guidance

Staff reporter

The manufacturer and supplier, which produces pumps and water handling and waste management systems for mines and quarries, among a host of other industry segments, posted revenues of $5.2 billion last year.

"Solid demand and disciplined execution in our largest markets drove margin expansion and delivery on our earnings commitments," said company CEO and president Patrick Decker.

"Steady revenue growth in our utilities business has been partially offset, however, by notable weakening in industrial and commercial end-markets.

"The near-term softness in those market environments has caused us to lower our organic revenue and earnings guidance.  Nevertheless, we expect to exit the year with sizable backlogs as our core utilities business remains healthy and the digital transformation of the water sector continues to gather pace. This gives us confidence in our ability to continue to outperform the market in 2020, and deliver mid-single-digit growth over the long term."

Xylem's net income for the first nine months of 2019 was $283 million versus $324 million for the same period in 2018, while September-quarter net income this year was half last year at $65 million.

Xylem shares (NYSE: XYL) fell 8.8% Thursday to $76.69, capitalising the company at $13.81 billion.