Xylem Inc.’s XYL 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 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 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 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%.
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Xylem Inc. (XYL): Free Stock Analysis Report
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