Evoqua Water Technologies Stock Gains After Mixed Q3 Earnings; Reiterates FY21 Sales Outlook

Evoqua Water Technologies Corp AQUA reported third-quarter revenue growth of 6.3% year-over-year to $369.7 million and increased 3.2% on an organic basis, beating the consensus estimate of $364.92 million.
Integrated Solutions and Services revenue increased 11% Y/Y to $239.7 million, and Applied Product Technologies increased 9.2% Y/Y to $130 million.
The gross profit increased by 6.2% Y/Y $117.03 million, and the margin was flat at 31.7%.
Operating profit increased by 16.0% Y/Y to $37.8 million.
EPS decreased to $0.11 from $0.18 in 3Q20, missing a consensus of $0.19. The decline in net income of 39.4% was primarily related to increased operating expenses and increased interest expenses.
Evoqua Water generated cash from operating activities year-to-date of $102.86 million, compared to $100.67 million a year ago.
Adjusted EBITDA increased by 3.2% Y/Y to $66.2 million, and margin contracted by 45 bps to 17.9%.
"We are seeing improving demand across most of our end markets, as evidenced by our book-to-bill ratio that is greater than 1.1, and our robust opportunity pipeline. Our market demand is strong, but macro supply chain challenges and customer site access could impact backlog conversion timing," said CEO Ron Keating.
FY21 Outlook: Evoqua expects revenues of $1.43 to $1.47 billion vs. a consensus estimate of $1.45 billion and adjusted EBITDA of $240 to $255 million.
Price action: AQUA shares are trading higher by 7.09% at $35.49 on the last check Tuesday.