Xylem (XYL) to Post Q1 Earnings: What's in the Offing?

Zacks Equity Research

30 April 2024 at 9:47 am·4-min read

Xylem Inc. XYL is scheduled to release first-quarter 2024 results on May 6, before market open.

The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 11.5%.

Let’s see how things might have shaped up prior to the announcement.

Factors to Note

The Measurement & Control Solutions (“M&CS”) segment’s first-quarter results are likely to benefit from improving supply chains and strong demand in the test and measurement market. The Zacks Consensus Estimate for the M&CS segment’s revenues is pegged at $475 million, indicating a 17% jump from the year-ago reported number.

Growth in the utilities and industrial end markets is expected to have boosted the Water Infrastructure segment’s performance. The consensus mark for the Water Infrastructure segment’s revenues is pegged at $751 million, implying a 27.5% surge from the year-ago reported figure.

The Evoqua acquisition in May 2023, which has expanded Xylem’s position in water technologies, solutions and services, and strengthened its foothold in lucrative end markets, is expected to have bolstered the company’s top line. The Zacks Consensus Estimate for the company’s first-quarter 2024 revenues is pegged at $2 billion, indicating an increase of 38.1% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at 84 cents per share, up 16.7% from the year-ago quarter’s reported number.

However, weakness in the residential building solutions market is expected to have ailed the performance of the Applied Water segment. The Zacks Consensus Estimate for the Applied Water segment’s revenues is pegged at $439 million, down 3.1% from the year-ago reported actuals.

The company’s bottom line is expected to have reflected the impact of raw material cost inflation and high labor, freight and overhead costs. Also, given XYL’s extensive presence in international markets, foreign currency headwinds are likely to have affected its profitability.

Xylem Inc. Price and EPS Surprise

Xylem Inc. price-eps-surprise | Xylem Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for XYL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: Xylem has an Earnings ESP of -0.44% as the Most Accurate Estimate is pegged at 84 cents per share, which is lower than the Zacks Consensus Estimate of 85 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: Xylem presently carries a Zacks Rank of 3.

Stocks to Consider

Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Atmus Filtration Technologies Inc. ATMU has an Earnings ESP of +0.57% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to release first-quarter results on May 3. ATMU delivered a trailing four-quarter earnings surprise of 20.3%, on average.

Chart Industries, Inc. GTLS has an Earnings ESP of +9.86% and a Zacks Rank of 1 at present. The company is slated to release first-quarter 2024 results on May 3.

Chart Industries’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, the average beat being 75.9%.

Axon Enterprise, Inc. AXON has an Earnings ESP of +5.97% and a Zacks Rank of 1 at present.

The company is scheduled to release first-quarter 2024 results on May 6. Axon’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 58.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Chart Industries, Inc. (GTLS) : Free Stock Analysis Report

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Factors to Note

Xylem Inc. Price and EPS Surprise

Earnings Whispers

Stocks to Consider

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