Water solutions provider,
) reported fourth-quarter 2013 results, showing year-over-year
improvement in both earnings and revenues. The company posted
adjusted earnings of $103 million or 56 cents a share compared
with $88 million or 47 cents in the year-ago quarter. This
represented a year-over-year increase of 19% on a per share
basis. Adjusted earnings for the reported quarter also surpassed
the Zacks Consensus Estimate of 52 cents by 7.7%.
On a GAAP basis, the company reported quarterly earnings of
$68 million or 37 cents per share from continuing operations
compared with $73 million or 39 cents in the fourth-quarter
For 2013, Xylem reported adjusted earnings per share of $1.67,
up 2.5% compared with the Zacks Consensus Estimate of $1.63.
Reported earnings were below the year-ago earnings of $1.77 per
share. On a GAAP basis, the company generated earnings per share
of $1.22, compared with $1.59 in 2012.
: Revenues for the reported quarter improved roughly 7% year over
year to $1.03 billion and beat the Zacks Consensus Estimate of
$990 million. The increase in revenues was a result of improved
demand in the industrial and public utility markets.
During the quarter, Xylem received total orders worth $986
million, which reflected an increase of 6% year over year on a
constant currency basis.
For 2013, Xylem reported revenues of $3,837 million, up from
the Zacks Consensus Estimate of $3,791 million. Revenues were
also higher than $3,791 million revenues generated in 2012.
Gross margin in 2013 was recorded at 39%, down slightly compared
with 40% in the year-ago quarter. Selling, general and
administrative expenses increased 8% year over year in 2013 to
$986 million. Adjusted operating margin in the year declined
roughly 110 basis points (bps) year over year to 11.8%.
segment generated revenues of $691 million in the quarter, up
8.5% year over year. The sales increase was a result of
improvement in the Transport business in the Americas and Europe.
The segment's adjusted operating margin declined 30 bps year over
year to 16.2%.
segment's revenues were recorded at $358 million compared with
$346 million in the year-ago quarter. The year-over-year sales
hike of 3% was a result of increase in the usage of industrial
and irrigation applications. The segment's adjusted operating
margin increased 120 bps year over year to 12.8%.
Balance Sheet/Cash Flow:
Exiting the fourth quarter of 2013, Xylem's cash and cash
equivalents were recorded at $533 million, compared with $394
million in the preceding quarter. Xylem had long-term debt of
$1,199 million, flat with the quarter-ended Sep 30, 2013.
In 2013, Xylem generated cash flow from operations of $324
million, against $396 million generated a year ago, while capital
expenditure was recorded at $126 million against $112 million in
In the fourth quarter of 2013, management approved a dividend
hike of 10% to 12.8 cents per share. The dividend will be paid on
Mar 19, 2014, to shareholders of record on Feb 19, 2014.
Management expects the growth momentum which started in the
second half of 2013 to continue even in 2014. Xylem expects
revenues in 2014 to be roughly $4.0 billion, up 2% to 4% year
over year. Adjusted net income is estimated in the range of $345
to $370 million, with earnings per share in the range of $1.85 to
Other Stocks to Consider
Xylem currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the industry include
Altra Industrial Motion Corp.
Barnes Group Inc.
The Middleby Corporation
). All these stocks carry a Zacks Rank #2 (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis
BARNES GRP (B): Free Stock Analysis Report
MIDDLEBY CORP (MIDD): Free Stock Analysis
XYLEM INC (XYL): Free Stock Analysis Report
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