Xylem, a global water technology company, reported revenue of $932 million in the second quarter, an increase of one percent over the prior year period.
Revenue growth reflects primarily a robust public utility end market globally with particular strength in the U.S. Reported operating margin in the quarter expanded 40 basis points to 11.7 percent, the company said in a statement.
Xylem’s Water Infrastructure segment contributed $566 million in the second quarter, up three percent over the prior year period, driven by the strength in the public utility end market, which was up 15 percent on a global basis in the quarter and 22 percent in the U.S. In addition, major projects in the Emerging Markets, particularly in India, contributed to the gains. This progress was partially offset by weakness in the industrial end market, notably the ongoing declines in oil and gas in North America and the global mining sector.
Xylem’s Applied Water, which consists of its portfolio of businesses in residential and commercial building services, and industrial and agricultural applications, recorded revenue of $366 million, down from $369 million in the prior year period and flat in constant currency. Segment sales in Western Europe grew 14 percent as new product sales and channel investments helped drive share gains in the industrial and commercial end markets. This growth was offset by declines in the U.S. and China.
Patrick Decker, Xylem president and chief executive officer, said, “We continued to capitalize on robust growth in the global public utility sector, which helped to offset softness in the industrial end market. Our teams also delivered strong performance in executing against our productivity initiatives. These results enabled us to continue to invest in key growth initiatives, which will drive our long-term performance.”
Xylem reaffirmed its forecast of full-year 2016 revenue of approximately $3.7 billion, including approximately one-percent growth from completed acquisitions and the unfavorable impacts of foreign exchange. On an organic basis, Xylem’s revenue growth now is anticipated to be in the range of two to three percent.
Rajani Baburajan