Key Takeaways
- First quarter 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 intake reached $2.2 billion, reflecting a 3% increase compared to the prior year
- Annual 2026 revenue forecast elevated to a range of $9.2B–$9.3B
- Shares advanced 1.6% during premarket hours before Tuesday’s market opening
Xylem delivered a quarter that showcased strength in profitability despite modest topline challenges, with first quarter results released Tuesday morning revealing earnings that outperformed Wall Street projections while sales figures came in marginally below expectations.
The global water infrastructure specialist announced adjusted earnings per share of $1.12 for the quarter, exceeding analyst forecasts of $1.09. This marks an improvement from the $1.03 reported during the comparable period last year.
Quarterly sales reached $2.1 billion, representing a 3% climb year over year on a reported basis. On an organic basis—which excludes the impact of foreign exchange fluctuations and merger activity—revenue remained unchanged. The Street had anticipated $2.11 billion, resulting in a marginal shortfall on revenue.
Order bookings totaled $2.2 billion during the quarter, climbing 3% versus the year-ago period on a reported basis, while holding steady organically. When order growth outpaces revenue growth, it typically signals positive momentum for upcoming quarters.
Adjusted EBITDA margin improved by 20 basis points compared to last year, reaching 20.6%. The company attributed the margin enhancement to operational efficiency initiatives and favorable pricing dynamics, which counterbalanced inflationary pressures and volume headwinds.
Chief Executive Matthew Pine offered a balanced perspective on the results. “We entered the year with sustained momentum and solid demand across key end markets,” he commented. “While the external environment remains dynamic, our teams are executing well, staying close to customers, and advancing long-term priorities.”
Full-Year Forecast Receives Upward Revision
Xylem lifted its 2026 annual revenue projection modestly. Management now anticipates sales between $9.2 billion and $9.3 billion, an increase from the previously communicated range of $9.1 billion to $9.2 billion. This updated guidance implies reported growth of 2% to 3% for the full year.
The company maintained its full-year adjusted earnings per share forecast in the $5.35 to $5.60 range. The midpoint of $5.48 trails the Street consensus estimate of $5.49 by a slim margin.
Management also projects full-year adjusted EBITDA margin will land between 22.9% and 23.3%, which would represent year-over-year expansion of 70 to 110 basis points compared to 2025 performance.
Jefferies analyst Stephen Volkmann characterized the quarterly performance as “in line.” While not overwhelmingly enthusiastic, investors appeared satisfied with the results based on the stock’s premarket reaction.
Stock Performance Update
Shares of Xylem climbed 1.6% in premarket activity, reaching $125.50, despite broader market futures indicating a slightly negative open.
Heading into Tuesday’s session, XYL shares had declined 9% since the beginning of the year and posted only a 6% gain over the trailing twelve-month period. The stock experienced an 8% selloff following its fourth quarter earnings release in February.
Reported earnings per share for the first quarter came in at $0.79, up 14% from the $0.69 recorded in the corresponding quarter of the previous year.
The first quarter results appeared to provide at least temporary stabilization for the stock’s recent downward trajectory.
