Why Xylem Stock Tumbled on Thursday

Core Viewpoint - Xylem's recent quarterly earnings report led to a significant decline in its stock price, as the company missed revenue and guidance expectations, resulting in a more than 6% drop compared to the S&P 500's nearly 2% decrease [1]. Financial Performance - Xylem reported third-quarter revenue of $2.1 billion, reflecting a 1% year-over-year increase. The adjusted net income was just under $244 million, or $1.11 per share, slightly up from $242 million in the previous year [2]. - Analysts had anticipated higher revenue of $2.17 billion, while the company met the adjusted net income estimate of $1.11 per share [3]. Guidance Update - For the full year 2024, Xylem updated its revenue guidance to $8.5 billion, which would represent a 15% year-over-year increase. The adjusted net income guidance was narrowed to a range of $4.22 to $4.24 per share, slightly below the previous range of $4.18 to $4.28 [4]. - The upper ends of both revenue and adjusted net income guidance fell short of analyst consensus projections, which were nearly $8.6 billion for revenue and $4.26 per share for adjusted net income [4]. Market Reaction - The third-quarter results did not provide any inspiring news, and the dual guidance misses negatively impacted investor sentiment, leading to a sell-off in the stock [5].