Xylem Gears Up to Report Q3 Earnings: What's in the Offing?

Xylem Inc. XYL is scheduled to release third-quarter 2025 results on Oct. 28, before market open.

The Zacks Consensus Estimate for XYL’s third-quarter revenues is pegged at $2.22 billion, indicating growth of 5.7% from the prior-year quarter’s number. The consensus mark for earnings is pinned at $1.24 per share, which has been stable in the past 60 days. The figure indicates an increase of 11.7% from the year-ago quarter’s figure.

The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters and matched the mark in one, the average surprise being 6.1%.

Let’s see how things have shaped up for Xylem this earnings season.

Factors Likely to Have Shaped the Quarterly Performance

Strength in the transport application business, driven by increased infrastructure projects in the United States, is anticipated to have supported the Water Infrastructure segment’s performance. Strong momentum in the treatment applications business, supported by increasing capital projects in emerging markets, is also likely to have augmented its performance. The Zacks Consensus Estimate for the Water Infrastructure segment’s revenues is pegged at $647 million, indicating 3.9% growth from the year-ago figure.

Robust demand for advanced metering infrastructure solutions like smart and energy metering and strong backlog execution are likely to have augmented the performance of the Measurement & Control Solutions (M&CS) segment. The Zacks Consensus Estimate for the M&CS segment’s revenues is pinned at $503 million, reflecting an increase of 9.8% from the year-ago quarter’s figure.

Strength in XYL’s dewatering applications business across industrials and utility markets, supported by strong rental demand and capital projects, is likely to augment the Water Solutions and Services segment’s results. The Zacks Consensus Estimate for the Water Solutions and Services segment’s revenues is $605 million, indicating 5% growth year over year.

A recovery in the Applied Water segment, supported by higher demand for commercial building solutions applications, including pumps, valves and dispensing equipment, is likely to augment the segment’s results. The Zacks Consensus Estimate for the Applied Water segment’s revenues is pegged at $464 million, indicating 3.8% growth from the year-ago figure.

Xylem’s acquisition of Vacom Systems (in April 2025), a wastewater treatment company, enhances its capabilities in providing sustainable water solutions. Also, its buyout of a majority stake in Idrica (in December 2024) boosted its growth opportunities and enabled it to penetrate new markets and deliver intelligent solutions to its customers. These buyouts are expected to bolster its top-line results in the to-reported quarter.

However, XYL’s bottom line is likely to have reflected the impact of high raw material costs, labor, freight and overhead costs in the third quarter. Also, business integration expenses related to the Vacom Systems buyout are expected to have hurt its margins.

Xylem Inc. Price and EPS Surprise

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

Earnings Whisper

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: XYL has an Earnings ESP of -0.13%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: XYL presently carries a Zacks Rank of 2.

Stocks With the Favorable Combination

Here are three companies, which according to our model, have the right combination of elements to post an earnings beat this season.

Republic Services RSG has an Earnings ESP of +0.41% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release third-quarter 2025 results on Oct. 30. RSG’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 8%.

SPX Technologies, Inc. SPXC has an Earnings ESP of +0.21% and a Zacks Rank of 2 at present. The company is slated to release third-quarter results on Oct. 30.

SPXC’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.6%.

WEX Inc. WEX has an Earnings ESP of +0.65% and a Zacks Rank of 2 at present. The company is slated to release its third-quarter 2025 results on Oct. 29.

WEX delivered an average earnings surprise of 2.4% in the last four quarters, while beating estimates thrice and missing once.

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This article originally published on Zacks Investment Research (zacks.com).

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