Key Highlights
- First quarter adjusted earnings per share reached $1.12, surpassing the analyst consensus of $1.09
- Quarterly revenue totaled $2.1 billion, falling just short of the $2.11 billion projection
- Order backlog hit $2.2 billion, representing a 3% increase from the prior year
- Company elevated its 2026 annual revenue forecast to a range of $9.2B–$9.3B
- Shares advanced 1.6% during premarket hours before Tuesday’s market opening
Xylem delivered a first quarter performance Tuesday that showed strength in profitability despite a marginal revenue shortfall, sending shares higher in early trading.
The water infrastructure solutions provider announced adjusted earnings of $1.12 per share for the quarter, eclipsing Wall Street’s $1.09 projection. This represents an improvement from the $1.03 reported in the comparable period last year.
Quarterly sales reached $2.1 billion, marking a 3% year-over-year increase on a reported basis. When adjusted for currency fluctuations and acquisitions on an organic basis, revenue remained essentially unchanged. The figure came in marginally below the analyst target of $2.11 billion.
The company’s order book totaled $2.2 billion, climbing 3% compared to last year on a reported basis, while holding steady organically. When order intake outpaces revenue, it typically signals positive momentum for upcoming quarters.
Adjusted EBITDA margins improved by 20 basis points year over year, landing at 20.6%. The company attributed this expansion to efficiency improvements and strategic pricing decisions that counterbalanced inflationary pressures and weaker volume trends.
CEO Matthew Pine adopted a cautiously optimistic stance in his remarks. “We began the year with continued momentum and robust demand throughout critical end markets,” he noted. “Despite ongoing external uncertainties, our organization is performing effectively, maintaining customer relationships, and pursuing strategic long-term objectives.”
Company Raises Revenue Forecast
Xylem made an upward adjustment to its full-year 2026 revenue expectations. Management now projects sales between $9.2 billion and $9.3 billion, an increase from the previous range of $9.1 billion to $9.2 billion. This updated guidance implies reported growth of 2% to 3%.
The company maintained its full-year adjusted earnings per share guidance at $5.35 to $5.60. The range’s midpoint of $5.48 falls marginally below the Street’s consensus estimate of $5.49.
Management also anticipates full-year adjusted EBITDA margins between 22.9% and 23.3%, which would represent an expansion of 70 to 110 basis points compared to 2025 performance.
Jefferies analyst Stephen Volkmann characterized the quarterly results as “in line.” While not an enthusiastic assessment, investors appeared satisfied with the performance.
Stock Performance Update
Xylem shares gained 1.6% in premarket activity, reaching $125.50, even as broader market futures showed modest declines.
Prior to Tuesday’s session, XYL had declined 9% year to date and posted only a 6% gain over the trailing 12-month period. The stock experienced an 8% pullback following its fourth quarter earnings release in February.
Reported earnings per share for the first quarter came to $0.79, up 14% from the $0.69 recorded in last year’s first quarter.
The latest quarterly results appear to have stabilized the stock’s recent downward trajectory.
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