Mueller Water Products (NYSE:MWA) beats Q3 CY2026 sales expectations but full-year sales guidance misses expectations significantly

Water infrastructure products manufacturer Mueller Water Products reported calendar Q3 2026 (fiscal Q4 2026) results beating Wall Street’s revenue expectations, but revenue fell by 1.1% year on year to $376.5 million. On the other hand, the company’s full-year revenue guidance of $1.46 billion at the midpoint came in 3.8% below analysts’ consensus estimates. Its non-GAAP profit of $0.38 per share was in line with analysts’ consensus estimates.

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“We delivered record profitability to close fiscal 2026 with our fourth quarter adjusted EBITDA increasing 4.0% year-over-year and adjusted EBITDA margin expanding to 25.4%. These results capped another record year for the Company, as we expanded adjusted EBITDA margin by 240 basis points this year and 940 basis points over three years, achieved record net sales with 3.2% year-over-year growth, despite slower new residential construction activity, increased adjusted earnings per share by approximately 20% and generated more than $200 million in free cash flow. That combination of sales growth, stronger profitability and outstanding cash generation underscores the quality of our execution, the stability of our business and the dedication of our employees,” said Paul McAndrew, President and Chief Executive Officer of Mueller Water Products.

Revenue growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Mueller Water Products grew its revenue at a tepid 5.8% compounded annual growth rate. That was an underwhelming result compared to the rest of the industrials sector, but there are still things to like about Mueller Water Products.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Mueller Water Products’s annualized revenue growth of 5.9% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Mueller Water Products’s revenue fell by 1.1% year on year to $376.5 million but beat Wall Street’s consensus estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, according to S&P, a deceleration versus the last two years. That underwhelming projection indicates its products and services will see some demand headwinds. On the positive side, the company is tracking well in other measures of financial health.

Operating margin

Mueller Water Products has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, with an average operating margin of 14.4%. That outcome is unsurprising given its favorable gross margin baseline.

Analyzing the trend in its profitability, Mueller Water Products’s operating margin rose by 10.8 percentage points over the last five years, as its revenue growth gave it operating leverage.

This quarter, Mueller Water Products generated an operating margin of 19.4%, up 1.1 percentage points year on year. The increase was a positive sign, and its operating margin rose more than its gross margin, indicating greater efficiency in expenses such as marketing, research and development and administrative overhead.

Earnings per share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its revenue through excessive spending on advertising and promotions.

Mueller Water Products’s EPS grew at a 23.3% compounded annual growth rate over the last five years, higher than its 5.8% annualized revenue growth. This indicates the company became more profitable on a per-share basis as it expanded.

A closer look at Mueller Water Products’s earnings helps explain the drivers of its performance. As noted earlier, Mueller Water Products’s operating margin expanded by 10.8 percentage points over the last five years. On top of that, its share count shrank by 1.4%. These are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth.

As with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Mueller Water Products, its two-year annual EPS growth of 27.2% was higher than its five-year trend. That acceleration is a positive sign, particularly given the already high base.

In Q3, Mueller Water Products reported adjusted EPS of $0.38, in line with the same quarter last year. This result beat analysts’ consensus estimates by 1%. Over the next 12 months, Wall Street expects Mueller Water Products’s full-year EPS to stay about the same, moving from $1.57 to $1.56, according to S&P.

Key takeaways from Mueller Water Products’s Q3 results

Mueller Water Products delivered a mixed quarter overall: EBITDA beat analysts’ consensus estimates and revenue narrowly topped Wall Street’s consensus, but full-year revenue guidance fell short. Shares remained flat at $24.03 immediately after the results.

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