Xylem (NYSE:XYL) Posts Earnings Results

Xylem (NYSE:XYL) released its earnings results on Tuesday. The industrial products company reported $1.46 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.34 by $0.12, Zacks reports. Xylem had a net margin of 11.15% and a return on equity of 11.77%. The firm had revenue of $2.34 billion during the quarter, compared to analyst estimates of $2.34 billion. During the same period last year, the business earned $1.26 earnings per share. The business’s revenue was up 1.5% on a year-over-year basis. Xylem updated its FY 2026 guidance to 5.550-5.700 EPS.

Here are the key takeaways from Xylem’s conference call:

• Q2 profitability and EPS exceeded expectations: Revenue rose 1% year over year, EBITDA margin expanded 150 basis points to 23.3%, and adjusted EPS increased 16% to a record $1.46. Ending backlog was $5.3 billion, with quarterly book-to-bill well above one.
• Data-center and industrial demand is accelerating: Applied Water data-center orders increased more than 300% in Q2, while full-year data-center revenue is expected to rise approximately 200%. Xylem also cited major industrial wins, including an approximately $850 million, 23-year outsourced-water project and a 20-year chemical-sector commitment.
• Electric-metering project delays reduced the growth outlook: Xylem lowered its full-year organic revenue-growth range to 2%-3% from 2%-4%, citing affordability concerns and more cautious utility spending ahead of elections. MCS full-year revenue growth is now expected to be in the low double digits.
• Despite lower revenue expectations, full-year EPS guidance increased: The company raised its adjusted EPS range to $5.55-$5.70 from $5.35-$5.60, supported by stronger margins and share repurchases. Full-year EBITDA margin guidance also increased to 23.1%-23.5%, and Xylem remains on track for a low-double-digit free-cash-flow margin.
• China remains a material headwind: Q2 China sales declined nearly 30%, including a 40% drop in Water Infrastructure, with the market expected to represent roughly 2% of total sales this year. Xylem said it has narrowed its China exposure and is being more selective about business pursued there.

Xylem Stock Down 4.1%

NYSE XYL traded down $4.95 during mid-day trading on Thursday, reaching $117.18. The stock had a trading volume of 552,395 shares, compared to its average volume of 2,017,130. Xylem has a 1 year low of $105.29 and a 1 year high of $154.27. The stock has a market cap of $27.85 billion, a PE ratio of 27.94, a price-to-earnings-growth ratio of 1.75 and a beta of 1.03. The company has a fifty day moving average price of $114.92 and a 200 day moving average price of $122.32. The company has a debt-to-equity ratio of 0.23, a current ratio of 1.61 and a quick ratio of 1.10.

Xylem Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Thursday, May 28th were given a dividend of $0.43 per share. The ex-dividend date of this dividend was Thursday, May 28th. This represents a $1.72 annualized dividend and a dividend yield of 1.5%. Xylem’s dividend payout ratio (DPR) is 42.79%.

Analyst Ratings Changes

XYL has been the topic of several recent research reports. Weiss Ratings downgraded Xylem from a “hold (c+)” rating to a “hold (c)” rating in a research note on Friday, May 8th. Robert W. Baird lifted their price objective on Xylem from $163.00 to $165.00 and gave the company an “outperform” rating in a research note on Wednesday. Royal Bank Of Canada boosted their target price on Xylem from $159.00 to $164.00 and gave the stock an “outperform” rating in a report on Wednesday. JPMorgan Chase & Co. reduced their price target on Xylem from $170.00 to $160.00 and set an “overweight” rating for the company in a report on Thursday, April 16th. Finally, Barclays raised their price target on Xylem from $154.00 to $159.00 and gave the company an “overweight” rating in a report on Wednesday. Nine equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, Xylem has a consensus rating of “Moderate Buy” and a consensus price target of $153.85.

Insider Activity at Xylem

In other Xylem news, Director Jerome A. Peribere purchased 1,210 shares of the firm’s stock in a transaction dated Monday, May 4th. The stock was purchased at an average price of $116.61 per share, for a total transaction of $141,098.10. Following the completion of the purchase, the director directly owned 27,209 shares of the company’s stock, valued at $3,172,841.49. This trade represents a 4.65% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, CAO Geri-Michelle Mcshane sold 4,269 shares of the business’s stock in a transaction on Thursday, May 7th. The stock was sold at an average price of $117.46, for a total value of $501,436.74. Following the completion of the transaction, the chief accounting officer owned 3,605 shares of the company’s stock, valued at $423,443.30. This represents a 54.22% decrease in their position. The SEC filing for this sale provides additional information. Corporate insiders own 0.32% of the company’s stock.

Institutional Investors Weigh In On Xylem

Several large investors have recently bought and sold shares of the business. Wexford Capital LP bought a new position in Xylem during the 3rd quarter valued at about $27,000. FWL Investment Management LLC bought a new stake in shares of Xylem in the second quarter worth approximately $43,000. DV Equities LLC purchased a new position in shares of Xylem during the fourth quarter valued at approximately $46,000. Johnson Financial Group Inc. purchased a new position in shares of Xylem during the third quarter valued at approximately $77,000. Finally, Zions Bancorporation National Association UT lifted its position in Xylem by 36.1% during the fourth quarter. Zions Bancorporation National Association UT now owns 679 shares of the industrial products company’s stock valued at $92,000 after purchasing an additional 180 shares during the period. 87.96% of the stock is currently owned by institutional investors.

Xylem Company Profile

Xylem Inc (NYSE: XYL) is a global water technology company that designs, manufactures and services engineered systems and equipment for the transport, treatment, testing and efficient use of water. Its product portfolio spans pumps and pumping systems, valves, filtration and disinfection equipment, sensors and analytical instruments, and digital solutions for monitoring and control of water infrastructure. Xylem serves the full water cycle with offerings for water and wastewater utilities, industrial customers, commercial and residential buildings, and agricultural applications.

The company was established as an independent publicly traded company in 2011 following a corporate spin-off from ITT Corporation and is headquartered in Rye Brook, New York.