Xylem 10-Q: Q3 EPS $1.25, Revenue Down 3.0%, 2026 Outlook Cut to ~1% Decline
XYL is trading near its 52-week low of $94.91 (0.6% above the low) on elevated volume (1.9× avg).
Summary
Xylem's Q3 10-Q shows revenue down 3.0% to $2.2 billion with EPS of $1.25 ($1.44 adjusted), while 2026 guidance now calls for roughly a 1% revenue decline and flat organic growth.
Key Events · Earnings and Guidance · XYL
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Q3 Revenue Falls 3.0%
Revenue was $2,201 million versus $2,268 million, with $80 million of divestiture losses and a 0.3% organic decline partly offset by $17 million from acquisitions.
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Margins Expand on Tariff Refunds
Gross margin rose 230 bp to 41.2% and operating margin 280 bp to 17.5%, including $39 million of IEEPA tariff refunds; diluted EPS was $1.25 and adjusted EPS $1.44.
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2026 Outlook Cut
Full-year guidance now calls for total revenue down approximately 1% and flat organic revenue, versus the 2-3% organic growth guided in July.
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Orders and Backlog Grow
Orders of $2,331 million rose 6.9% (9.9% organic) and backlog reached $5,466 million, up 13.4% year over year.
Analysis · XYL · Technology
The 10-Q puts full numbers behind this morning's guidance cut. Revenue fell 3.0% to $2,201 million as divestitures removed $80 million and organic sales slipped 0.3%, yet margins expanded: gross margin rose 230 bp to 41.2% and operating margin 280 bp to 17.5%, helped by $39 million of IEEPA tariff refunds. The problem is the top line. Management now expects total 2026 revenue to decline about 1% with flat organic growth, a step down from the 2-3% organic growth guided in July. Orders of $2,331 million (+6.9%) and backlog of $5,466 million (+13.4%) argue demand is intact, but the stock sits near its 52-week low, so the market is focused on the weaker sales trajectory and the debt taken on for the $1.46 billion Cornell/Roper deal.
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At the time of this filing, XYL was trading at $95.51 on NYSE in the Technology sector, with a market capitalization of approximately $22.3B. The 52-week trading range was $94.91 to $154.27. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.