Xylem Inc. (NYSE: XYL), a leading innovator in global water technology, has announced impressive fourth-quarter and full-year results for 2023, showcasing substantial growth and setting optimistic projections for 2024. The company's strategic execution and robust demand across its business segments have led to notable achievements in revenue, earnings per share, and organic growth.
In the fourth quarter, Xylem achieved orders totaling $2.0 billion, marking a 42% increase on a reported basis and a 10% rise organically. Revenue soared to $2.1 billion, up by 41% reported and 9% organically. Earnings per share increased by 34% to $1.10, while adjusted earnings per share slightly declined by 1% to $0.99. These results exceeded the company’s prior guidance, demonstrating Xylem's strong execution and market demand.
For the full year, Xylem reported revenue of $7.4 billion, a 33% increase on a reported basis and 12% organically. Earnings per share rose by 42% to $2.79, with adjusted earnings per share growing by 20% to $3.78. The company has initiated its 2024 full-year revenue guidance at $8.4 to $8.5 billion, indicating a 3% to 5% organic growth, and an adjusted earnings per share range of $4.00 to $4.20.
Matthew Pine, President and CEO of Xylem, expressed pride in the team's exceptional performance in the fourth quarter, attributing the success to disciplined focus and resilient demand. He highlighted that the acquisition and integration of Evoqua is ahead of schedule, further enhancing Xylem's capability to address the water challenges of its customers.
The company's net income reached $266 million, or $1.10 per share, with a net income margin increase of 270 basis points to 12.6%. Adjusted net income was reported at $239 million, or $0.99 per share. The fourth-quarter adjusted EBITDA margin stood at 19.6%, up by 90 basis points year-over-year, driven by productivity savings, strong price realization, and higher volume.
Xylem's Board of Directors declared a first-quarter dividend of $0.36 per share, up by 9%, payable on March 20, 2024, to shareholders of record as of February 21, 2024.
Looking ahead, Xylem anticipates a full-year 2024 revenue of approximately $8.4 to $8.5 billion, with an adjusted EBITDA margin expected to be between 19.4% to 19.9%, reflecting an increase from the 2023 adjusted results. The company also expects full-year free cash flow conversion to net income to be approximately 115%.
