By: Scott Davis
XYL put up another solid quarter, though this is not a market that’s been kind to industrials, regardless of how good quarterly prints have been. Still, 7% core growth is the strongest result XYL has put up in 7 years and will be top quartile of our coverage that’s tracking at 5% this quarter; generally led by more cyclical names. Order books up 11% supports the outlook for the rest of the year. Margins up 60 bps is a bit better than the group this quarter up 45 bps, and EPS up 30% is impressive and speaks to successful M&A activity (particularly given little in the way of tax tailwinds).