Greentech Lead America: Xylem, a global water technology company, has reported net income of $46 million in the second quarter of 2013.
The company’s second quarter revenue was 960 million, down $6 million from the second quarter 2012.
Strength in the company’s U.S. residential, commercial and agriculture business was more than offset by continued softness in Europe, as well as in the public utilities and industrial markets, the company said.
Second quarter 2013 adjusted operating margins were 10.2 percent, excluding the impact of restructuring and realignment costs, down 380 basis points resulting from lower volume and continued investments in growth initiatives, the unfavorable impact of foreign exchange rates, and other items.
“While our second quarter results were lower than expected, we captured important contract wins in June, resulting in record orders of more than $1 billion in the quarter,” said Gretchen McClain, president and chief executive officer of Xylem.
“We continue to take strong and decisive actions to position the company for efficient operation and profitable growth. While we’re seeing the initial benefits from our on-going restructuring and organizational realignment, we are accelerating additional short- and long-term actions to further reduce our cost base and drive more efficiencies throughout our business,” McClain added.
McClain said the company expects to benefit from investments in growth initiatives and from continued efforts to transform the business and improve growth execution.
The company is hopeful with its second quarter order rate and several new products it launched during the second quarter, including the ‘smart’ dewatering solutions from Flygt and Godwin that are efficient, compact and meet our customers’ needs for more reliable and durable technologies,” McClain said.
“These new products and some key contract wins give us confidence in an improved second half of the year and position us for long-term growth,” McClain added.
During the quarter, the company began working with its local partner Visenti in Singapore to monitor and improve that country’s water infrastructure and help preserve its limited water supply. In China, Xylem was awarded a large contract from the Beijing Drainage Group to improve downtown Beijing water stations’ storage capability by installing its Flygt pumps. In Spain, the company received its first order for the newly launched open channel ultraviolet disinfection system, WEDECO Duron.
Xylem won several large orders for industrial fire protection systems with oil and gas giant CNOOC in China; and Xylem also won a contract for a pre-treatment system to remove harmful microorganisms from seawater prior to desalination in the United Arab Emirates.
Xylem’s full-year revenues are now expected to be approximately $3.7 billion, and adjusted net income is expected to be in the range of $260 to $279 million, down from the earlier projection of adjusted net income of $1.79 to $1.89 per share.
Xylem’s Water Infrastructure segment revenue for the second quarter 2013 was $596 million, down 6 percent organically compared with the second quarter 2012, reflecting U.S. industrial weakness, European economic challenges and decreased treatment project shipments.
Second quarter adjusted segment operating income was $63 million. Adjusted operating margin was 10.6 percent, down 480 basis points from last year reflecting lower volumes, acquisition impacts, continued investments, unfavorable foreign exchange rates, and other items.
In Applied Water segment, Xylem revenue was $381 million, up 1 percent organically compared with the second quarter 2012, reflecting strong growth in U.S. residential, commercial and agricultural end markets, partially offset by weak industrial demand and European economic challenges.