Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (Before Market Open)
Pre-Earnings Price$89.27Last close (Oct 30, 2023)
Post-Earnings Price$95.30Open (Oct 31, 2023)
Price Change
$6.03(+6.75%)
- Strong and resilient demand in the Water Infrastructure segment, with order rates being robust and resilient demand in both developed markets and emerging markets excluding China.
- Positive secular trends, including water scarcity, aged infrastructure, and water quality concerns, are buoying the business, along with government funding expected over the next 6-7 years globally. The Integrated Solutions and Services (ISS) business model, with 75% services and aftermarket, is increasing cash flow diversity as we move into 2024, providing great momentum.
- The Idrica partnership is exceeding expectations, with over 200 customers engaged globally, resulting in a tremendous pipeline build and significant contract wins, such as a $40 million AMI deal in the U.S. and $20 million of treatment and metrology in Europe. This is enabling bundling of offerings and pull-through of products and solutions, which is really exciting.
- The company is experiencing weakness in the Middle East and in its Applied Water business.
- Pricing is expected to moderate in 2024, which could impact margins as previous price increases are lapped.
- The mix will continue to be lumpy, especially due to energy, potentially affecting profitability into 2024.