Xylem Inc. (XYL - Free Report) is scheduled to release second-quarter 2020 results on Jul 30, before market open.
The company delivered weaker-than-expected results in one of the trailing four quarters, while recording in-line results in the others. Earnings surprise was a negative 9.46%, on average. In the last reported quarter, the company’s earnings of 23 cents lagged the Zacks Consensus Estimate of 37 cents.
In the past three months, shares of this water solutions provider have moved up 2% compared with the industry’s growth of 14%.
Let us delve deeper.
Key Factors & Estimates for Q2
Xylem’s second-quarter results are expected to reflect the impacts of the coronavirus outbreak on its businesses in end markets served. Also, cost inflation and unfavorable movements in foreign currencies might have played spoilsport, as it did in the first quarter of 2020.
However, the severity of the headwinds is expected to have been partially offset by benefits from the company’s diversified business structure, solid product offerings and contract wins in both emerging and developed nations. Also, cost-management efforts and a healthy balance sheet are anticipated to have aided performance.
The company expects second-quarter revenues to decline 14% on a year-over-year basis, with organic sales expected to fall 12%. Notably, it previously projected an organic sales decline of 20-30% for the second quarter.
Adjusted earnings per share in the second quarter are anticipated to be 37-39 cents, suggesting rise from 23 cents reported in the first quarter. On a reported basis, earnings will likely be 15-17 cents in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues of $1,111 million suggests a 17.4% dip from the year-ago reported figure and a 1.1% decline from the previous quarter. The estimate for earnings is pegged at 32 cents per share, suggesting a decline of 59.9% from the year-ago quarter’s reported figure and 39.1% growth from the first quarter of 2020.
For the Water Infrastructure segment, the Zacks Consensus Estimate for revenues is pegged at $430 million, implying a 23.4% slip from the figure reported a year ago and a 1.8% fall from the sequential quarter. The revenue estimate for Applied Water is pegged at $279 million, suggesting declines of 29.2% and 17.5% from the year-ago quarter’s reported figure and the previous quarter, respectively.
Also, Measurement & Control Solutions’ revenue estimate is pegged at $279 million, suggesting a 28.5% decline from the year-ago reported figure and a fall of 19.6% from the previous quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Xylem this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. That is exactly the case with Xylem as shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Xylem has an Earnings ESP of +21.09% as both the Most Accurate Estimate of 39 cents is above the Zacks Consensus Estimate of 32 cents.
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Xylem Inc. (XYL - Free Report) is scheduled to release second-quarter 2020 results on Jul 30, before market open.
The company delivered weaker-than-expected results in one of the trailing four quarters, while recording in-line results in the others. Earnings surprise was a negative 9.46%, on average. In the last reported quarter, the company’s earnings of 23 cents lagged the Zacks Consensus Estimate of 37 cents.
In the past three months, shares of this water solutions provider have moved up 2% compared with the industry’s growth of 14%.
Let us delve deeper.
Key Factors & Estimates for Q2
Xylem’s second-quarter results are expected to reflect the impacts of the coronavirus outbreak on its businesses in end markets served. Also, cost inflation and unfavorable movements in foreign currencies might have played spoilsport, as it did in the first quarter of 2020.
However, the severity of the headwinds is expected to have been partially offset by benefits from the company’s diversified business structure, solid product offerings and contract wins in both emerging and developed nations. Also, cost-management efforts and a healthy balance sheet are anticipated to have aided performance.
The company expects second-quarter revenues to decline 14% on a year-over-year basis, with organic sales expected to fall 12%. Notably, it previously projected an organic sales decline of 20-30% for the second quarter.
Adjusted earnings per share in the second quarter are anticipated to be 37-39 cents, suggesting rise from 23 cents reported in the first quarter. On a reported basis, earnings will likely be 15-17 cents in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues of $1,111 million suggests a 17.4% dip from the year-ago reported figure and a 1.1% decline from the previous quarter. The estimate for earnings is pegged at 32 cents per share, suggesting a decline of 59.9% from the year-ago quarter’s reported figure and 39.1% growth from the first quarter of 2020.
For the Water Infrastructure segment, the Zacks Consensus Estimate for revenues is pegged at $430 million, implying a 23.4% slip from the figure reported a year ago and a 1.8% fall from the sequential quarter. The revenue estimate for Applied Water is pegged at $279 million, suggesting declines of 29.2% and 17.5% from the year-ago quarter’s reported figure and the previous quarter, respectively.
Also, Measurement & Control Solutions’ revenue estimate is pegged at $279 million, suggesting a 28.5% decline from the year-ago reported figure and a fall of 19.6% from the previous quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Xylem this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. That is exactly the case with Xylem as shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Xylem has an Earnings ESP of +21.09% as both the Most Accurate Estimate of 39 cents is above the Zacks Consensus Estimate of 32 cents.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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