WASHINGTON, D.C. - Xylem Inc. (NYSE: NYSE:XYL), a Fortune 500 global water solutions company, announced today the acquisition of a majority stake in Idrica, a leader in water data management and analytics. This strategic move is set to enhance Xylem's digital water solutions portfolio, Xylem Vue, by integrating Idrica’s technology to provide real-time insights to water utilities facing challenges such as water scarcity and aging infrastructure.
Matthew Pine, CEO of Xylem, emphasized the importance of the partnership with Idrica, stating that it is a "critical piece" of their strategy to offer intelligent solutions. "Together, we can help [customers] see deeper into their networks and use insights to solve long-standing problems like water loss more effectively and affordably than ever before," Pine said.
Jaime Barba, CEO of Idrica and head of Xylem Vue, highlighted the complexities water utilities face in utilizing data for decision-making. The collaboration aims to simplify the management of digital assets and operations for water and wastewater utilities, offering a "simple, secure and holistic view."
The Xylem Vue platform has already been deployed by water utilities worldwide, helping them optimize infrastructure and adapt to new conditions. InvestingPro analysis shows Xylem maintains a robust financial health score of GOOD, supported by strong cash flows and consistent dividend payments for 14 consecutive years. Notably, the City of Hot Springs, Arkansas, utilized the platform to reduce non-revenue water loss by nearly 50%, while Servicios de Agua y Drenaje de Monterrey in Mexico achieved an overall water savings of 17%, with up to 37% in specific pipeline sections.
Xylem's acquisition of Idrica is expected to bolster its position in the water management industry by expanding its capabilities in intelligent solution delivery. The company, with a workforce of 23,000, reported pro forma revenue of $8.1 billion in 2023, reflecting its commitment to optimizing water and resource management. Based on InvestingPro's Fair Value analysis, Xylem appears to be trading near its fair value, with analysts projecting continued profitability and over 10 additional exclusive ProTips available for subscribers.
This article is based on a press release statement from Xylem Inc.
In other recent news, Xylem Inc., a global water technology company, reported a robust third-quarter performance with earnings per share (EPS) rising by 12% to $1.11, and EBITDA margins hitting a record high of 21.2%. Despite facing challenges in the Measurement & Control Solutions and Water Solutions and Services segments, the company experienced slight organic revenue growth and an 8% increase in orders, leading to a substantial backlog. Xylem also announced strategic moves, including plans to increase its stake in the Idrica joint venture and the appointment of Meredith (NYSE:MDP) Emerick as leader of the Applied Water segment. The company maintained its revenue expectation at $8.5 billion, approximately 15% growth, and narrowed its full-year earnings guidance to an EPS of $4.22 to $4.24.
In other developments, Xylem declared a fourth-quarter dividend of $0.36 per share, reflecting its ongoing commitment to delivering shareholder value and underscoring its financial strength. The dividend is payable to shareholders of record at the close of business on an unspecified date.
TD Cowen recently adjusted its outlook on Xylem by reducing the price target to $125 from the previous $138, while maintaining a Hold rating on the stock. The decision reflects the analyst firm's perspective on the current market challenges faced by Xylem, despite confidence in the management's ability to execute its strategic plan. The firm suggests that the anticipated EPS growth of around 10% does not present an attractive investment opportunity given Xylem's stock is trading at over 25 times forward earnings. These are the recent developments in Xylem's financial outlook and strategic advancements.
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