Water technology company and pump manufacturer Xylem posted first quarter revenue of $1.3 billion, surpassing previous guidance in each of its business segments. Revenue for the first quarter was $1.272 billion compared to $1.256 billion in the first quarter of 2021, a 1.3-percent increase.
Strong global demand drove record orders and backlog for Xylem. First quarter adjusted EBITDA margin decreased 290 basis points to 14.2 percent. Inflation, strategic investments, and the impact of chip shortages drove the margin decline, exceeding the benefits of price realization and productivity savings.
“The team delivered a strong result on very robust demand, despite a challenging operating environment,” said Patrick Decker, Xylem’s president and CEO. “That healthy demand drove record quarterly order intake in each segment of our business, and year-on-year backlog growth of 50 percent across the portfolio. As anticipated, we are seeing gradual improvement in chip supply, and revenues grew faster than our expectations, as did margin performance overall.
“We expect global demand for our solutions to remain strong, and the team is doing an outstanding job realizing price from our position of market leadership. So, we are raising full-year guidance on revenue, and lifting the low end of our EPS range. Despite near-term headwinds from inflation and currency effects, our underlying momentum gives us even greater confidence we are on track to achieve our growth and strategic milestones we laid out at our Investor Day last autumn.”
Xylem now expects full-year 2022 organic revenue growth to be in the range of 4 to 6 percent, and 1 to 3 percent on a reported basis. This represents an increase from the company’s previous full-year organic revenue guidance of 3 to 5 percent and 1 to 3 percent on a reported basis. Reported revenue growth remains the same as previous guidance.
