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Xylem (XYL) Up 4.4% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Xylem Inc. (XYL - Free Report) . Shares have added about 4.4% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Xylem Posts In-Line Q1 Earnings, Lifts '17 EPS Outlook
Xylem reported mixed first-quarter 2017 results.
Earnings: Quarterly adjusted earnings came in at $0.37 per share, lower than the Zacks Consensus Estimate of $0.39. However, the bottom-line came higher than the year-ago tally of $0.35 per share.
Revenues: Quarterly revenues were $1,071 million, up 26.4% year over year. In addition, the top line handily beat the Zacks Consensus Estimate of $1,061 million.
Margins/Costs: Xylem’s cost of revenues for the reported quarter came in at $659 million, up 27.2% year over year. Selling, general and administrative expenses came in at $272 million compared to $219 million recorded in the year-ago period. Research and development expenses were $42 million, as against $25 million reported in the prior-year quarter.
Gross profit margin during the quarter was 38.5%, down 30 basis points (bps) year over year. Quarterly adjusted operating margin was 10.5%, down 40 basis points (bps) year over year.
Segment Details: The Water Infrastructure segment generated revenues of $496 million as against $514 million recorded in the comparable period last year.
Revenues from the Applied Water segment totaled $333 million, flat year over year.
The company’s recently formed Sensus business segment generated revenues worth $242 million in the reported quarter.
Balance Sheet and Cash Flow: Xylem exited first-quarter 2017 with cash and cash equivalents of $287 million compared with $308 million as of Dec 31, 2016. Long-term debt was $2,126 million, as against $2,108 million recorded at the end of 2016.
In the first quarter, Xylem generated cash of $52 million from operating activities compared with $41 million recorded in the prior-year quarter. Capital expenditure came in at $43 million as against $37 million incurred in the year-ago quarter.
Outlook: Xylem is poised to grow on the back of strong public utility and health sector trade, the Sensus business buyout, as well as increasing demand from emerging markets. Based on these positives, the company raised its full-year 2017 adjusted earnings guidance to the $2.23–$2.38 per share range, higher than the previously estimated range of $2.20–$2.35 per share. However, the company reaffirmed its previous revenue guidance in the band of $4.5–$4.6 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Xylem's stock has an average Growth Score of 'C'. However, its Momentum is lagging a bit with a 'D'. The stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Xylem (XYL) Up 4.4% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Xylem Inc. (XYL - Free Report) . Shares have added about 4.4% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Xylem Posts In-Line Q1 Earnings, Lifts '17 EPS Outlook
Xylem reported mixed first-quarter 2017 results.
Earnings: Quarterly adjusted earnings came in at $0.37 per share, lower than the Zacks Consensus Estimate of $0.39. However, the bottom-line came higher than the year-ago tally of $0.35 per share.
Revenues: Quarterly revenues were $1,071 million, up 26.4% year over year. In addition, the top line handily beat the Zacks Consensus Estimate of $1,061 million.
Margins/Costs: Xylem’s cost of revenues for the reported quarter came in at $659 million, up 27.2% year over year. Selling, general and administrative expenses came in at $272 million compared to $219 million recorded in the year-ago period. Research and development expenses were $42 million, as against $25 million reported in the prior-year quarter.
Gross profit margin during the quarter was 38.5%, down 30 basis points (bps) year over year. Quarterly adjusted operating margin was 10.5%, down 40 basis points (bps) year over year.
Segment Details: The Water Infrastructure segment generated revenues of $496 million as against $514 million recorded in the comparable period last year.
Revenues from the Applied Water segment totaled $333 million, flat year over year.
The company’s recently formed Sensus business segment generated revenues worth $242 million in the reported quarter.
Balance Sheet and Cash Flow: Xylem exited first-quarter 2017 with cash and cash equivalents of $287 million compared with $308 million as of Dec 31, 2016. Long-term debt was $2,126 million, as against $2,108 million recorded at the end of 2016.
In the first quarter, Xylem generated cash of $52 million from operating activities compared with $41 million recorded in the prior-year quarter. Capital expenditure came in at $43 million as against $37 million incurred in the year-ago quarter.
Outlook: Xylem is poised to grow on the back of strong public utility and health sector trade, the Sensus business buyout, as well as increasing demand from emerging markets. Based on these positives, the company raised its full-year 2017 adjusted earnings guidance to the $2.23–$2.38 per share range, higher than the previously estimated range of $2.20–$2.35 per share. However, the company reaffirmed its previous revenue guidance in the band of $4.5–$4.6 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Xylem's stock has an average Growth Score of 'C'. However, its Momentum is lagging a bit with a 'D'. The stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.