(Reuters) – Xylem trimmed its annual revenue forecast after reporting lower-than-expected sales for some of its key equipment used for water treatment, dragging the company’s shares nearly 5% lower in premarket trade.
The water technology firm now expects revenue of $8.50 billion for 2024, compared with a previous forecast of about $8.55 billion.
Analysts had expected it to report revenue of $8.58 billion this year, according to data compiled by LSEG.
Sales from its water infrastructure unit, which offers products such as water and wastewater pumps, stood at $623 million, falling short of analysts’ estimate of $658.5 million.
Xylem’s applied water unit, which sells pumps, valves and other equipment, brought in sales of $447 million, below expectations of $451.2 million.
Weakness in these segments weighed on the company’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). It reported adjusted EBITDA of $447 million, well below expectations of $456 million, according to estimates provided by Jefferies.
Still, CEO Matthew Pine said demand for Xylem’s products remained resilient as total orders grew 8% to 2,201 in the quarter ended Sept.30.
The company reported third-quarter revenue of $2.10 billion, compared with analysts’ estimate of $2.17 billion.
Analysts expect a full-year profit of $4.26 per share, according to data compiled by LSEG.
On an adjusted basis, Xylem posted a profit of $1.11 per share for the quarter, in line with Street expectations as weakness across its key segments was offset by slightly better margins and favorable tax rates, according to Jefferies analyst Saree Boroditsky.
The company also narrowed its annual profit forecast to between $4.22 and $4.24 per share, with the mid-point being the same as its previous range of $4.18 to $4.28 per share.
(Reporting by Mariam Sunny in Bengaluru; Editing by Sonia Cheema)