The company now projects annual revenue to decline by roughly 1% to $8.95 billion, a stark pivot from previous expectations of 2% growth. Organic revenue is expected to remain flat, while adjusted earnings per share were lowered to a range of $5.40 to $5.45. Third-quarter revenue fell 3% to $2.2 billion, missing the $2.28 billion forecast, while adjusted earnings of $1.44 per share narrowly failed to meet analyst expectations of $1.45.

To counter the slowdown, Xylem plans to divest its Applied Water International and Specialty Flow Control units. By 2027, the firm intends to consolidate operations into three segments, prioritizing high-growth sectors like data centers and microelectronics. Despite the revenue miss, net income for the quarter rose to $291 million from $227 million in the same period last year, and the company maintains a free cash flow margin near the lower end of its 10.2% to 11% target range.