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Water solutions firm Xylem Q3 revenue misses on projects timing, cautious spending

By Reuters News


Overview

  • US water solutions firm's Q3 revenue fell 3% and missed analyst expectations

  • Adjusted EPS for Q3 missed analyst expectations

  • Company to divest two business units, shift to three-segment structure in 2027


Outlook

  • Xylem lowers 2026 revenue forecast to about $8.95 bln, down 1% year over year

  • Company expects 2026 adjusted EPS of $5.40 to $5.45, down from prior $5.55-$5.70 range

  • Xylem sees 2026 adjusted EBITDA margin at about 23.2%, up 100 bps from 2025


Result Drivers

  • PROJECT TIMING AND CAUTIOUS SPENDING - Co said Q3 revenue was impacted by timing of projects and more cautious spending decisions

  • PRODUCTIVITY AND PRICE REALIZATION - Co said productivity savings and strong price realization drove margin expansion, offsetting inflation and lower volumes

  • ORDER GROWTH - Co reported strong order activity, with Q3 orders up 7% reported and 10% organically


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Miss

$2.20 bln

$2.28 bln (16 Analysts)

Q3 Adjusted EPS

Miss

$1.44

$1.45 (16 Analysts)

Q3 EPS

$1.25

Q3 Adjusted Net Income

Miss

$336 mln

$343.05 mln (12 Analysts)


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

  • Wall Street's median 12-month price target for Xylem Inc is $141.00, about 30.3% above its October 26 closing price of $108.24

  • The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 20 three months ago


Reuters Recommended Reads

  • Oct 27 - Switzerland's INFICON Q3 sales jump, lifts FY outlook on firm semiconductor demand

  • Oct 27 - Sweden's Alfa Laval Q3 sales rise on order intake

  • Oct 27 - Assa Abloy third-quarter earnings beat forecast, helped by pricing and cost control


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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