Xylem roots out growth in US public utilities to offset tough fourth quarter in water
LONDON, England - Global water technology company Xylem’s share price has risen nearly 2% on the release of the company’s full 2016 financial results and increased forecast for 2017.
For the full year 2016, Xylem generated $3.8 billion in revenue, up on a forecast in May of $3.7 billion (read story).
From this, full-year reported net income was $260 million, with an operating margin of 10.8%.
The release of the financial results bumped the company’s share price up over the $50 mark at the time of reporting, up from $49.06 yesterday.
Xylem has forecast 2017 revenue to be in the range of $4.5 to $4.6 billion, up 20% to 22%, including growth from previously announced acquisitions and projected unfavorable impacts of foreign exchange translation.
The company’s water infrastructure segment reported fourth quarter 2016 revenue of $612 million, down 2% compared with the same period last year.
Xylem attributed the decline to an “ongoing softness in the oil and gas sector and industrial end market, partially offset by continuing growth in the U.S. public utility sector and large project deliveries in Emerging Markets”.
After acquiring US smart metering company Sensus last October (read story), for the final two months of 2016, Sensus revenue was $132 million – a loss of $17 million, which includes $26 million of acquisition-related and restructuring costs.
Excluding those costs, adjusted operating income for the segment was $9 million. Sensus began 2017 with $388 million in backlog, of which approximately half is expected to be realized in 2017.
Patrick Decker, CEO of Xylem, said: “For the year, we generated organic revenue growth in mixed market conditions, and grew our operating margins and earnings in a meaningful way. While the industrial end market was challenged in certain regions, we grew share in the public utility sector as our industry-leading brands and solutions were increasingly the preferred choice of customers worldwide.”
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