The 10-second takeaway
For the quarter ended June 30 (Q2), Xylem met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank significantly.
Margins dropped across the board.
Xylem chalked up revenue of $960.0 million. The nine analysts polled by S&P Capital IQ foresaw net sales of $967.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.36. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.45 per share. Non-GAAP EPS of $0.36 for Q2 were 27% lower than the prior-year quarter's $0.49 per share. GAAP EPS of $0.25 for Q2 were 48% lower than the prior-year quarter's $0.48 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 38.6%, 100 basis points worse than the prior-year quarter. Operating margin was 9.5%, 450 basis points worse than the prior-year quarter. Net margin was 4.8%, 440 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $985.7 million. On the bottom line, the average EPS estimate is $0.52.
Next year's average estimate for revenue is $3.87 billion. The average EPS estimate is $1.82.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 80 members out of 84 rating the stock outperform, and four members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give Xylem a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xylem is outperform, with an average price target of $30.21.
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