Xylem Inc.’s XYL first-quarter 2026 adjusted earnings of $1.12 per share beat the Zacks Consensus Estimate of $1.09. The bottom line increased 9% year over year.
XYL’s revenues of $2.13 billion beat the consensus estimate of $2.11 billion. The top line increased 2.7% year over year, driven by solid demand across the Measurement & Control Solutions segment. Organic revenues were flat in the quarter.
Also, orders of $2.23 billion increased 3% year over year on a reported basis and were flat on an organic basis.
XYL's Segmental Details
Revenues in the Water Infrastructure segment totaled $603 million, up 4% year over year. Organic sales declined 1% year over year due to a decrease in demand for its products and solutions for the treatment of water. The Zacks Consensus Estimate was pegged at $599 million.
The Applied Water segment generated revenues of $448 million, up 3% year over year. Organic sales were flat in the quarter. The segmental performance was driven by strength in the commercial end market. The consensus estimate was pegged at $444 million.
Quarterly revenues of the Measurement & Control Solutions segment totaled $508 million, up 4% year over year. The Zacks Consensus Estimate was pegged at $493 million. Organic sales were up 1% year over year, driven by an increase in energy metering demand.
Quarterly revenues at the Water Solutions and Services segment totaled $566 million, up 1% year over year. Organic sales were down 2% year over year, due to a decrease in capital projects. The consensus estimate was pegged at $578 million.
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 $437 million, up 3.3% from the year-ago quarter’s level. The margin improved to 20.6% from 20.4% in the prior-year quarter.
Adjusted operating income was $342 million, up 5.2% year over year. Adjusted operating margin increased to 16.1% from 15.7% in the year-earlier quarter.
Xylem’s Balance Sheet and Cash Flow
Exiting the first quarter, Xylem had cash and cash equivalents of $808 million compared with $1.48 billion at the end of December 2025. Long-term debt was $1.41 billion at the end of the quarter, flat compared with the figure reported at the end of December 2025.
In the first three months of 2026, XYL generated net cash of $108 million from operating activities compared with $33 million in the year-ago period. Capital expenditure was $90 million, up 26.8% from the year-earlier period.
Rewards to Shareholders
In the first three months of 2026, Xylem paid dividends of $106 million, up 8.2% year over year. The company also bought back shares worth $563 million in the same period compared with $13 million in the year-ago period.
XYL's 2026 Guidance
Xylem has updated its 2026 revenue outlook. The company now expects revenues to be $9.2-$9.3 billion for 2026 compared with $9.1-$9.2 billion anticipated earlier. This indicates an increase of 2-3% from the prior-year level on a reported basis and 2-4% on an organic basis.
Adjusted EBITDA margin is estimated to be approximately 22.9-23.3%, indicating an expansion of 70-110 basis points from the year-earlier actual.
XYL forecasts adjusted earnings to be in the range of $5.35-$5.60 per share.
Zacks Rank & Stocks to Consider
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
Graco Inc. GGG posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $528.3 million.
Danaher Corporation’s DHR first-quarter 2026 adjusted earnings of $2.06 per share beat the Zacks Consensus Estimate of $1.95. The bottom line increased 9.6% year over year.
Danaher reported net sales of $5.95 billion, which missed the consensus estimate of $5.99 billion. However, the metric increased 3.5% year over year.
3M Company MMM delivered adjusted earnings of $2.14 per share in the first quarter of 2026, which surpassed the Zacks Consensus Estimate of $2.02. The bottom line increased 14% year over year.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.02 billion. On an adjusted basis, organic revenues increased 1.2% year over year.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
3M Company (MMM): Free Stock Analysis Report
Danaher Corporation (DHR): Free Stock Analysis Report
Graco Inc. (GGG): Free Stock Analysis Report
Xylem Inc. (XYL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).