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The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 14.4%.
Let’s see how things have shaped up for Xylem this earnings season.
Factors to Note
Strength across the utilities and industrial water applications end markets is expected to have driven Xylem’s fourth-quarter results. The Measurement & Control Solutions (“M&CS”) segment is benefiting from improving supply chains and strong demand in the test and measurement market. The Zacks Consensus Estimate for the M&CS segment’s revenues indicates a 15.9% jump from the year-ago reported number.
Growth in the utilities and industrial end markets is expected to have boosted the Water Infrastructure segment’s performance. The consensus mark for the Water Infrastructure segment’s revenues suggests an approximate 24.1% surge from the year-ago reported figure.
Strength in both the building solutions and industrial end markets is likely to have augmented the performance of the Applied Water segment. However, weakness in the residential end market has lately been weighing on the unit. The Zacks Consensus Estimate for the Applied Water segment’s revenues hints at a muted increase of 0.7% from the year-ago reported number.
The Evoqua acquisition in May 2023, which has expanded Xylem’s position in water technologies, solutions and services and strengthened its foothold in lucrative end markets, is expected to have bolstered its top-line results in the to-be-reported quarter.
Given strength across its businesses, Xylem expects revenues of $7.3 billion in 2023, indicating an approximately 32% jump on a reported basis and close to 11% on an organic basis.
However, the company’s bottom line may reflect the impact of raw material cost inflation and high labor, freight and overhead costs in the fourth quarter. Unfavorable foreign currency movements might also have affected the company’s margins and profitability.
Our proven model predicts 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 odds of an earnings beat. That is the case here.
Xylem has an Earnings ESP of +1.40%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company carries a Zacks Rank #3 at present.
Other Stocks With the Favorable Combination
Here are three other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming release:
The company is slated to release fourth-quarter results on Feb 22. ALRM delivered a trailing four-quarter earnings surprise of 35%, on average.
Atmus Filtration Technologies Inc. (ATMU - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #3. The company is slated to release fourth-quarter results on Feb 14. ATMU delivered a trailing four-quarter earnings surprise of 23.4%, on average.
Ingersoll Rand (IR - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank #3. The company is slated to release fourth-quarter results on Feb 15. IR delivered a trailing four-quarter earnings surprise of 16.1%, on average.
Image: Bigstock
Xylem (XYL) Gears Up to Post Q4 Earnings: Is a Beat in Store?
Xylem Inc. (XYL - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 6 before market open.
The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 14.4%.
Let’s see how things have shaped up for Xylem this earnings season.
Factors to Note
Strength across the utilities and industrial water applications end markets is expected to have driven Xylem’s fourth-quarter results. The Measurement & Control Solutions (“M&CS”) segment is benefiting from improving supply chains and strong demand in the test and measurement market. The Zacks Consensus Estimate for the M&CS segment’s revenues indicates a 15.9% jump from the year-ago reported number.
Growth in the utilities and industrial end markets is expected to have boosted the Water Infrastructure segment’s performance. The consensus mark for the Water Infrastructure segment’s revenues suggests an approximate 24.1% surge from the year-ago reported figure.
Strength in both the building solutions and industrial end markets is likely to have augmented the performance of the Applied Water segment. However, weakness in the residential end market has lately been weighing on the unit. The Zacks Consensus Estimate for the Applied Water segment’s revenues hints at a muted increase of 0.7% from the year-ago reported number.
The Evoqua acquisition in May 2023, which has expanded Xylem’s position in water technologies, solutions and services and strengthened its foothold in lucrative end markets, is expected to have bolstered its top-line results in the to-be-reported quarter.
Given strength across its businesses, Xylem expects revenues of $7.3 billion in 2023, indicating an approximately 32% jump on a reported basis and close to 11% on an organic basis.
However, the company’s bottom line may reflect the impact of raw material cost inflation and high labor, freight and overhead costs in the fourth quarter. Unfavorable foreign currency movements might also have affected the company’s margins and profitability.
Xylem Inc. Price and EPS Surprise
Xylem Inc. price-eps-surprise | Xylem Inc. Quote
Zacks Model
Our proven model predicts 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 odds of an earnings beat. That is the case here.
Xylem has an Earnings ESP of +1.40%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company carries a Zacks Rank #3 at present.
Other Stocks With the Favorable Combination
Here are three other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming release:
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release fourth-quarter results on Feb 22. ALRM delivered a trailing four-quarter earnings surprise of 35%, on average.
Atmus Filtration Technologies Inc. (ATMU - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #3. The company is slated to release fourth-quarter results on Feb 14. ATMU delivered a trailing four-quarter earnings surprise of 23.4%, on average.
Ingersoll Rand (IR - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank #3. The company is slated to release fourth-quarter results on Feb 15. IR delivered a trailing four-quarter earnings surprise of 16.1%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.