Xylem Cuts 2026 Guidance, Will Divest Two Units and Reorganize Into Three Segments
XYL is trading near its 52-week low of $98.58 (4.5% above the low).
Summary
Xylem cut 2026 revenue and EPS guidance while reporting Q3 EPS of $1.25 ($1.44 adjusted) on $2.2 billion of revenue, and announced plans to divest two businesses and reorganize into three segments in 2027.
Key Events · Earnings and Guidance · XYL
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2026 Guidance Cut on Softer Revenue
Full-year revenue is now seen at approximately $8.95 billion, down 1% reported and flat organic, versus prior guidance of up 2% reported and up 2-3% organic. Adjusted EPS guidance falls to $5.40-$5.45 from $5.55-$5.70.
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Q3 Earnings: Margins Up, Revenue Down
EPS of $1.25 (up 34%) and adjusted EPS of $1.44 (up 5%) on revenue of $2.2 billion, down 3% reported and flat organic. Adjusted EBITDA margin rose 70 basis points to 23.9% on productivity and price.
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Two Businesses Marked for Divestiture
Xylem announced intent to divest Applied Water International and Specialty Flow Control, saying proceeds will be redirected toward higher-growth markets such as data centers and microelectronics. No buyer, price or timetable was disclosed.
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Four Segments Collapse to Three in 2027
Effective January 1, 2027, Xylem moves to Treatment and Services (Rodney Aulick), Flow Solutions (Joe Johnston) and Measurement and Analytics (Meredith Emmerich), eliminating the Water Infrastructure segment.
Analysis · XYL · Technology
Xylem lowered full-year 2026 revenue guidance to about $8.95 billion (down 1% reported, flat organic) from prior guidance of up 2% reported and up 2-3% organic, and cut adjusted EPS to $5.40-$5.45 from $5.55-$5.70. The miss is not a demand collapse — orders rose 7% reported and 10% organically to $2.3 billion — but revenue fell 3% to $2.2 billion as project timing slipped and customers spent more cautiously. Alongside the numbers, management announced intent to divest Applied Water International and Specialty Flow Control and to collapse four segments into three on January 1, 2027, with the Water Infrastructure segment eliminated and its president, Hayati Yarkadas, stepping down as an executive officer to run the divestitures. The portfolio reshaping is the more durable story: it frees capital for data center and microelectronics verticals, but the guidance cut resets near-term expectations and the stock is already trading near its 52-week low.
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At the time of this filing, XYL was trading at $103.00 on NYSE in the Technology sector, with a market capitalization of approximately $25.3B. The 52-week trading range was $98.58 to $154.27. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.