Xylem Gears Up to Post Q2 Earnings: Here's What to Expect

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 5.9%.

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

Factors Likely to Have Shaped XYL’s Quarterly Performance

Strength in the transport application business, aided by increased infrastructure projects in the United States, is likely to have supported the Water Infrastructure segment’s performance. The Zacks Consensus Estimate for the Water Infrastructure segment’s revenues is pegged at $664 million, indicating 2.2% growth from the year-ago figure.

An increase in 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 $538 million, almost in line with the year-ago quarter’s figure.

Strength 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 $492 million, indicating 1.9% growth from the year-ago figure.

Recovery in Xylem’s dewatering applications business across utility and power end markets 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 pegged at $636 million, indicating 1.3% growth year over year.

The company’s acquisition of Vacom Systems (in April 2025), a wastewater treatment company, enhanced its capabilities in providing sustainable water solutions. This buyout is expected to bolster the company’s top-line results in the to-be-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 second quarter. Also, increased spending on strategic investments is expected to have hurt its margins.

Earnings Whisper

Our proven model does not conclusively predict an earnings beat for Xylem 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 -0.34%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: XYL presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Crane Company CR has an Earnings ESP of +4.73% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2026 results on July 28.

Crane’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.3%.

Ingersoll Rand Inc. IR has an Earnings ESP of +0.61% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2026 results on July 30.

Ingersoll Rand’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters while matching the mark in two, the average surprise being 2.4%.

Illinois Tool Works Inc. ITW has an Earnings ESP of +0.31% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2026 results on July 28.

Illinois Tool’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.8%.

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

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