Xylem Gears Up to Post Q4 Earnings: Here's What's in Store

Xylem Inc. XYL is scheduled to release fourth-quarter 2024 results on Feb. 4, before market open.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.2 billion, indicating growth of 3% from the prior-year quarter’s reported number. The consensus mark for earnings is pinned at $1.12 per share, which has edged down a penny in the past seven days. The figure indicates an increase of 13.1% from the year-ago quarter’s reported figure.The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 3.3%.Let us see how things have shaped up for Xylem this earnings season.Xylem Inc. Price and EPS Surprise  Xylem Inc. price-eps-surprise | Xylem Inc. QuoteFactors Likely to Have Shaped Quarterly PerformanceXylem has been experiencing persistent weakness in the Applied Water segment due to a reduced number of project wins. Soft demand for industrial and building solutions applications, including pumps, valves, heat exchangers, controls and dispensing equipment, is likely to weigh on the segment’s results . The Zacks Consensus Estimate for the Applied Water segment’s quarterly revenues is pegged at $453 million, indicating a decline of approximately 1% from the year-ago number.Growth in the transport application business, driven by a strong pipeline of capital projects in the United States and Western Europe, is anticipated to have supported the Water Infrastructure segment’s performance. However, weakness in the treatment applications business, across all major geographic markets, is likely to have affected its performance. The Zacks Consensus Estimate for the Water Infrastructure segment’s revenues is pegged at $709 million, indicating an 18.6% decline from the year-ago figure.Nevertheless, strength in XYL’s dewatering applications business in the United States and the emerging 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 segment’s revenues is pegged at $559 million, indicating 73.6% growth from the year-ago figure.Also, robust demand for the company’s advanced technology solutions like smart metering and other applications, primarily in the United States, is 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 $467 million, in line with the year-ago quarter’s figure.The company’s bottom line is likely to have reflected the impact of raw material cost inflation and high labor, freight and overhead costs in the fourth quarter. High business integration expenses related to the Idrica buyout are also expected to have hurt the bottom line .That said, the Evoqua acquisition in May 2023, which expanded Xylem’s position in water technologies, solutions and services and strengthened its foothold in lucrative end markets, is expected to bolster its top-line results.Amid this, Xylem expects revenues of $8.5 billion in 2024, indicating an approximately 15% jump on a reported basis and 5% on an organic basis. However, the current outlook reflects a decline from its previous projection of 16% and 5-6% growth on a reported and organic basis, respectively.What the Zacks Model UnveilsOur 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. That is not the case here, as elaborated below.Earnings ESP: Xylem has an Earnings ESP of -0.31%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).Stocks With the Favorable CombinationHere are three companies, which according to our model, have the right combination of elements to post an earnings beat this season.Allegion plc ALLE has an Earnings ESP of +1.34% 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 fourth-quarter results on Feb. 18. Allegion’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.9%.Flowserve Corporation FLS has an Earnings ESP of +2.60% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter results on Feb. 18.Flowserve’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, the average surprise being 10.8%.Stanley Black & Decker SWK has an Earnings ESP of +3.82% and a Zacks Rank of 3 at present. The company is slated to release its fourth-quarter 2024 results on Feb. 5.SWK’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 18.6%.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report Flowserve Corporation (FLS): Free Stock Analysis Report Xylem Inc. (XYL): Free Stock Analysis Report Allegion PLC (ALLE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks