We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Xylem Q3 Earnings Miss Estimates on Soft Metering and Projects
Read MoreHide Full Article
Key Takeaways
Xylem's Q3 adjusted EPS rose 5.1% year over year but missed estimates, while sales fell 3%.
Orders rose 7% to $2.33 billion, with strong growth in Applied Water and Measurement and Control Solutions.
Xylem lowered 2026 revenue guidance to $8.95 billion and adjusted EPS to $5.40-$5.45.
Xylem Inc.’s (XYL - Free Report) third-quarter 2026 adjusted earnings of $1.44 per share missed the Zacks Consensus Estimate of $1.47 by 2%. Still, the bottom line increased 5.1% year over year from $1.37, supported by productivity improvements and pricing.
XYL’s revenues of $2.22 billion missed the Zacks Consensus Estimate of $2.28 billion by 3.3%. On a reported basis, sales declined 3% year over year, while organic revenues were approximately flat. Metering affordability pressures and project timing weighed on sales. Orders increased 7% to $2.33 billion, with organic growth of 10%.
XYL's Segmental Details
Revenues in the Water Infrastructure segment totaled $645 million, down 2% year over year. Organic sales declined 1%, as weakness in Treatment more than offset strength in Transport. Segment orders totaled $675 million, down 1% on both a reported and organic basis. Transport helped support revenues, although overall demand reflected softer project activity in Treatment.
The Applied Water segment generated revenues of $489 million, up 7% year over year. Organic sales increased 9%, supported by strength in the Americas, including data center demand. Orders of $502 million rose 13% on a reported basis and 15% organically, reflecting growth in North American data centers and commercial applications.
Quarterly revenues of the Measurement and Control Solutions segment totaled $436 million, down 16% year over year. Organic sales fell 5%, primarily reflecting lower Electric Metering and Analytics volumes. Orders reached $504 million, increasing 13% on a reported basis and 30% organically, driven by Water and Gas Metering. The segment’s order improvement contrasted with near-term revenue pressure.
Quarterly revenues at the Water Solutions and Services segment totaled $631 million, approximately flat year over year. Organic sales declined 2%, reflecting the nonrecurrence of prior-year Services and Capital work. Orders increased 7% to $650 million, with organic growth of 6%, driven by capital projects. The stronger order intake helped support the company’s backlog.
Xylem’s adjusted EBITDA was $527 million, up 0.6% from the year-ago quarter’s level of $524 million. The margin improved to 23.9% from 23.2% in the prior-year quarter.
Adjusted operating income was $428 million, down 0.2% year over year. Adjusted operating margin increased to 19.4% from 18.9% in the year-earlier quarter.
Xylem’s Balance Sheet and Cash Flow
Exiting the third quarter, Xylem had cash and cash equivalents of $708 million compared with $1.48 billion at the end of December 2025. Long-term debt was $2.37 billion at the end of the quarter compared with $1.41 billion at the end of December 2025.
In the first nine months of 2026, XYL generated net cash of $729 million from operating activities compared with $698 million in the year-ago period. Capital expenditure was $268 million, up 8.1% from the year-earlier period.
Rewards to Shareholders
In the first nine months of 2026, Xylem paid dividends of $307 million, up 4.8% year over year. The company also bought back shares worth $1.58 billion in the same period compared with $14 million in the year-ago period.
XYL's 2026 Guidance
Xylem has lowered its 2026 outlook. The company now expects revenues of approximately $8.95 billion compared with the previous projection of $9.2 billion. This indicates a decline of approximately 1% from the prior-year level on a reported basis, while organic revenues are expected to remain flat.
Adjusted EBITDA margin is estimated to be approximately 23.2%, indicating an expansion of 100 basis points from the year-earlier actual.
XYL forecasts adjusted earnings in the range of $5.40-$5.45 per share, down from the previous guidance of $5.55-$5.70.
XYL’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
TTM Technologies, Inc. (TTMI - Free Report) came out with quarterly earnings of $1.46 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.25 per share. This compares with earnings of 67 cents per share a year ago.
TTMI posted revenues of $1.2 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 6.6%. This compares with year-ago revenues of $752.74 million.
Badger Meter, Inc. (BMI - Free Report) came out with quarterly earnings of $1.24 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.21 per share. This compares with earnings of $1.19 per share a year ago.
Badger Meter posted revenues of $235.94 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.95%. This compares with year-ago revenues of $235.65 million.
International Business Machines Corporation (IBM - Free Report) reported strong third-quarter 2026 results, with adjusted earnings rising 11% year over year to $2.95 per share. The figure beat the Zacks Consensus Estimate of $2.88 by 2.4%.
Revenues increased 4.7% to $17.10 billion, surpassing the consensus mark of $16.87 billion by 1.4%.
View the Zacks #1 Rank List
Image: Bigstock
Xylem Q3 Earnings Miss Estimates on Soft Metering and Projects
Key Takeaways
Xylem Inc.’s (XYL - Free Report) third-quarter 2026 adjusted earnings of $1.44 per share missed the Zacks Consensus Estimate of $1.47 by 2%. Still, the bottom line increased 5.1% year over year from $1.37, supported by productivity improvements and pricing.
XYL’s revenues of $2.22 billion missed the Zacks Consensus Estimate of $2.28 billion by 3.3%. On a reported basis, sales declined 3% year over year, while organic revenues were approximately flat. Metering affordability pressures and project timing weighed on sales. Orders increased 7% to $2.33 billion, with organic growth of 10%.
XYL's Segmental Details
Revenues in the Water Infrastructure segment totaled $645 million, down 2% year over year. Organic sales declined 1%, as weakness in Treatment more than offset strength in Transport. Segment orders totaled $675 million, down 1% on both a reported and organic basis. Transport helped support revenues, although overall demand reflected softer project activity in Treatment.
The Applied Water segment generated revenues of $489 million, up 7% year over year. Organic sales increased 9%, supported by strength in the Americas, including data center demand. Orders of $502 million rose 13% on a reported basis and 15% organically, reflecting growth in North American data centers and commercial applications.
Quarterly revenues of the Measurement and Control Solutions segment totaled $436 million, down 16% year over year. Organic sales fell 5%, primarily reflecting lower Electric Metering and Analytics volumes. Orders reached $504 million, increasing 13% on a reported basis and 30% organically, driven by Water and Gas Metering. The segment’s order improvement contrasted with near-term revenue pressure.
Quarterly revenues at the Water Solutions and Services segment totaled $631 million, approximately flat year over year. Organic sales declined 2%, reflecting the nonrecurrence of prior-year Services and Capital work. Orders increased 7% to $650 million, with organic growth of 6%, driven by capital projects. The stronger order intake helped support the company’s backlog.
Xylem Inc. Price, Consensus and EPS Surprise
Xylem Inc. price-consensus-eps-surprise-chart | Xylem Inc. Quote
XYL’s Margin Profile
Xylem’s adjusted EBITDA was $527 million, up 0.6% from the year-ago quarter’s level of $524 million. The margin improved to 23.9% from 23.2% in the prior-year quarter.
Adjusted operating income was $428 million, down 0.2% year over year. Adjusted operating margin increased to 19.4% from 18.9% in the year-earlier quarter.
Xylem’s Balance Sheet and Cash Flow
Exiting the third quarter, Xylem had cash and cash equivalents of $708 million compared with $1.48 billion at the end of December 2025. Long-term debt was $2.37 billion at the end of the quarter compared with $1.41 billion at the end of December 2025.
In the first nine months of 2026, XYL generated net cash of $729 million from operating activities compared with $698 million in the year-ago period. Capital expenditure was $268 million, up 8.1% from the year-earlier period.
Rewards to Shareholders
In the first nine months of 2026, Xylem paid dividends of $307 million, up 4.8% year over year. The company also bought back shares worth $1.58 billion in the same period compared with $14 million in the year-ago period.
XYL's 2026 Guidance
Xylem has lowered its 2026 outlook. The company now expects revenues of approximately $8.95 billion compared with the previous projection of $9.2 billion. This indicates a decline of approximately 1% from the prior-year level on a reported basis, while organic revenues are expected to remain flat.
Adjusted EBITDA margin is estimated to be approximately 23.2%, indicating an expansion of 100 basis points from the year-earlier actual.
XYL forecasts adjusted earnings in the range of $5.40-$5.45 per share, down from the previous guidance of $5.55-$5.70.
XYL’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
TTM Technologies, Inc. (TTMI - Free Report) came out with quarterly earnings of $1.46 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.25 per share. This compares with earnings of 67 cents per share a year ago.
TTMI posted revenues of $1.2 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 6.6%. This compares with year-ago revenues of $752.74 million.
Badger Meter, Inc. (BMI - Free Report) came out with quarterly earnings of $1.24 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.21 per share. This compares with earnings of $1.19 per share a year ago.
Badger Meter posted revenues of $235.94 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.95%. This compares with year-ago revenues of $235.65 million.
International Business Machines Corporation (IBM - Free Report) reported strong third-quarter 2026 results, with adjusted earnings rising 11% year over year to $2.95 per share. The figure beat the Zacks Consensus Estimate of $2.88 by 2.4%.
Revenues increased 4.7% to $17.10 billion, surpassing the consensus mark of $16.87 billion by 1.4%.