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Water specialist Xylem reports solid second quarter

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Global water technology specialist Xylem has reported its financial results for the second quarter of 2017.

Xylem’s net income over the period is reported at $99 million (€84 million), or $0.55 per share, the company delivering a net adjusted income of $106 million or $0.59 per share in the quarter. Year on year for the period, this represents a 23% increase on 2016, excluding the impact of restructuring, realignment and charges related to the acquisition of Sensus.

Second quarter revenue, including that contributed by the recently acquired Sensus, was $1.2 billion, up 25% on the previous year. This includes a 2% year-on-year increase in the Sensus business as well as 1% organic growth in the base Xylem business.

Xylem’s reported operating margin in the quarter increased 20 basis points to 11.9%, while the adjusted operating margin was 13.3%. Excluding the negative impact of purchase accounting amoritization related to the Sensus acquisition, the adjusted operating margin expanded by 100 basis points year-over-year.

“Our business performed well in the second-quarter and are capitalising on strong order activity that we expect to generate improved growth,” said Patrick Decker, president and CEO of Xylem. “In the second quarter, we turned in an 8% increase in orders with double digit growth in treatment orders, a strong harbinger for continued strength in the water utility sector. We are pleased with the growth momentum that continues in Sensus as well as the progress we’re making in further integrating the business.”

Decker continued: “Looking ahead, we have solid plans and are operating in improving end markets, which reinforce our confidence in our ability to deliver solid growth and margin expansion in line with our improved guidance for the full year.”

Xylem is now forecasting full-year 2017 revenue in the range of $4.65 billion to $4.70 billion, up 24% to 25%, including growth from previously announced acquisitions and projected impacts of foreign exchange translation. On an organic basis, which excludes the impact of acquisitions and the impact of foreign exchange translation, Xylem’s revenue growth is now expected to be in the range of 2% to 3%.