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The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised downward by 4.3% in the past 90 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 10.1%.
Let’s see how things have shaped up for Xylem this earnings season.
Strong underlying demand, supported by large infrastructure projects in the United States and Canada, is likely to have aided Xylem’s third-quarter performance. Pricing actions are expected to have supported the company’s bottom line.
The Water Infrastructure segment is expected to reflect higher revenues on the back of effective price realization and healthy activity in wastewater utility business in the United States and Western Europe. The Zacks Consensus Estimate for the company’s Water Infrastructure segment revenues in the third quarter indicates a 3.7% increase from the year-ago reported figure.
The Applied Water segment’s performance is expected to have benefited from strong price realization and backlog execution in industrial and residential end markets. The consensus mark for Applied Water segment revenues in the third quarter hints at a 9% jump from the year-ago reported number.
However, higher lead times and lower volumes due to supply-chain constraints are likely to have dampened Xylem’s third-quarter performance. Chip supply constraints are expected to have weighed on the Measurement & Control Solutions segment’s performance in the to-be-reported quarter.
Escalating cost of sales due to high raw material, labor, freight and overhead costs are likely to have dented Xylem’s bottom line in the third quarter. Given the company’s substantial international presence, foreign currency headwinds are expected to have impacted the top line.
What Does the Zacks Model Say?
Our proven model does not conclusively predict 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, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Xylem has an Earnings ESP of -0.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Xylem presently carries a Zacks Rank #2.
Highlights of Q2 Earnings
Xylem’s second-quarter 2022 adjusted earnings of 66 cents per share, surpassed the Zacks Consensus Estimate of 55 cents. The bottom line was flat year over year. Total revenues of $1,364 million also outperformed the Zacks Consensus Estimate of $1,304.3 million and inched up approximately 1% year over year. Organic sales in the quarter rose 6%, driven by higher global demand across its end markets coupled with record order and backlog across the portfolio..
Stocks to Consider
Here are some companies within the broader Industrial Products sector that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Sonoco Products (SON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.1%.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3. The company is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.
Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6%.
Image: Bigstock
Xylem (XYL) to Post Q3 Earnings: Will Cost Woes Mar Results?
Xylem Inc. (XYL - Free Report) is scheduled to release third-quarter 2022 results on Nov 1, before market open.
The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised downward by 4.3% in the past 90 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 10.1%.
Let’s see how things have shaped up for Xylem this earnings season.
Xylem Inc. Price and EPS Surprise
Xylem Inc. price-eps-surprise | Xylem Inc. Quote
Factors to Note
Strong underlying demand, supported by large infrastructure projects in the United States and Canada, is likely to have aided Xylem’s third-quarter performance. Pricing actions are expected to have supported the company’s bottom line.
The Water Infrastructure segment is expected to reflect higher revenues on the back of effective price realization and healthy activity in wastewater utility business in the United States and Western Europe. The Zacks Consensus Estimate for the company’s Water Infrastructure segment revenues in the third quarter indicates a 3.7% increase from the year-ago reported figure.
The Applied Water segment’s performance is expected to have benefited from strong price realization and backlog execution in industrial and residential end markets. The consensus mark for Applied Water segment revenues in the third quarter hints at a 9% jump from the year-ago reported number.
However, higher lead times and lower volumes due to supply-chain constraints are likely to have dampened Xylem’s third-quarter performance. Chip supply constraints are expected to have weighed on the Measurement & Control Solutions segment’s performance in the to-be-reported quarter.
Escalating cost of sales due to high raw material, labor, freight and overhead costs are likely to have dented Xylem’s bottom line in the third quarter. Given the company’s substantial international presence, foreign currency headwinds are expected to have impacted the top line.
What Does the Zacks Model Say?
Our proven model does not conclusively predict 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, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Xylem has an Earnings ESP of -0.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Xylem presently carries a Zacks Rank #2.
Highlights of Q2 Earnings
Xylem’s second-quarter 2022 adjusted earnings of 66 cents per share, surpassed the Zacks Consensus Estimate of 55 cents. The bottom line was flat year over year. Total revenues of $1,364 million also outperformed the Zacks Consensus Estimate of $1,304.3 million and inched up approximately 1% year over year. Organic sales in the quarter rose 6%, driven by higher global demand across its end markets coupled with record order and backlog across the portfolio..
Stocks to Consider
Here are some companies within the broader Industrial Products sector that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Sonoco Products (SON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.1%.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3. The company is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.
Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.