Key Highlights
- Q1 adjusted earnings per share reached $1.12, surpassing the analyst consensus of $1.09
- Quarterly revenue totaled $2.1 billion, marginally below the $2.11 billion forecast
- New order intake reached $2.2 billion, representing a 3% increase compared to the prior year
- Company elevated its full-year 2026 revenue projection to $9.2B–$9.3B
- Shares advanced 1.6% during premarket hours on Tuesday
The water technology specialist delivered a largely encouraging first-quarter performance on Tuesday, with profits exceeding forecasts despite a minor shortfall in revenue.
Xylem’s adjusted earnings per share for the quarter stood at $1.12, outperforming the Street’s $1.09 estimate. This marks an improvement from the $1.03 reported in the same quarter last year.
Quarterly sales reached $2.1 billion, reflecting a 3% increase versus the year-ago period on a reported basis. When adjusting for foreign exchange fluctuations and M&A activity, revenue remained essentially unchanged. The figure fell just short of the $2.11 billion analyst projection.
Order bookings totaled $2.2 billion for the quarter, up 3% year-over-year on a reported basis, while remaining flat organically. When orders outpace revenue, it typically signals positive momentum for upcoming quarters.
The company’s adjusted EBITDA margin improved by 20 basis points compared to last year, reaching 20.6%. Management attributed the expansion to efficiency improvements and favorable pricing dynamics, which more than compensated for inflationary pressures and weaker volume trends.
Chief Executive Matthew Pine offered a balanced assessment of the results. “We started the year with continued momentum and healthy demand across our core markets,” he noted. “Despite ongoing external uncertainties, our organization is performing effectively, maintaining close customer relationships, and progressing on strategic initiatives.”
Company Raises Revenue Forecast
Xylem increased its full-year 2026 revenue expectations modestly. Management now anticipates sales between $9.2 billion and $9.3 billion, up from the previous range of $9.1 billion to $9.2 billion. This implies reported growth of 2% to 3% for the year.
The company maintained its full-year adjusted earnings per share guidance at $5.35 to $5.60. The $5.48 midpoint falls slightly short of the $5.49 analyst consensus.
Management also projects full-year adjusted EBITDA margin between 22.9% and 23.3%, which would represent an expansion of 70 to 110 basis points versus 2025 performance.
Jefferies analyst Stephen Volkmann characterized the quarterly results as “in line.” While hardly enthusiastic, investors appeared to view the performance favorably enough.
Stock Performance Update
Shares of Xylem rose 1.6% in premarket activity, reaching $125.50, despite broader market futures trending slightly negative.
Prior to Tuesday’s session, XYL had declined 9% since the start of the year and posted only a 6% gain over the trailing twelve months. The stock experienced an 8% decline following its fourth-quarter earnings release in February.
Reported first-quarter earnings per share came in at $0.79, marking a 14% improvement from the $0.69 recorded in the prior-year period.
The Q1 results appear to have stabilized the stock, at least temporarily.
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