Mueller Water Products’ third quarter results were met with a negative market reaction, despite revenue and non-GAAP profits exceeding Wall Street expectations. Management attributed the quarter’s performance to robust volume growth in iron gate valves, hydrants, and specialty valves, as well as improved price realization. CEO Marietta Zakas highlighted manufacturing efficiencies and operational improvements as key factors behind the company’s expanded gross margins, noting, “Our team’s unwavering commitment and relentless focus on operational excellence and customer service enabled consolidated gross margin expansion of 500 basis points in the fourth quarter.”
Is now the time to buy MWA? Find out in our full research report (it’s free for active Edge members).
Mueller Water Products (MWA) Q3 CY2025 Highlights:
- Revenue: $380.8 million vs analyst estimates of $362.1 million (9.4% year-on-year growth, 5.2% beat)
- Adjusted EPS: $0.38 vs analyst estimates of $0.34 (12.3% beat)
- Adjusted EBITDA: $91.8 million vs analyst estimates of $85.6 million (24.1% margin, 7.2% beat)
- EBITDA guidance for the upcoming financial year 2026 is $347.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 18.3%, up from 8.2% in the same quarter last year
- Organic Revenue rose 9.4% year on year vs analyst estimates of 4.4% growth (494.1 basis point beat)
- Market Capitalization: $3.68 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mueller Water Products’s Q3 Earnings Call
- Bryan Blair (Oppenheimer): Asked about the split in sales growth between municipal and residential markets for the coming year; CFO Melissa Rasmussen explained that municipal repair and replacement is expected to grow modestly while residential construction will likely decline, with municipal strength offsetting residential weakness.
- Bryan Blair (Oppenheimer): Inquired about benefits from planned capital investments and M&A; President Paul McAndrew stated operational upgrades will support long-term capacity and margins, while CEO Zakas highlighted a focus on acquisitions that deepen the water infrastructure portfolio.
- Brian Lee (Goldman Sachs): Queried the trajectory for margin expansion across segments; Rasmussen noted both segments should see margin improvement, particularly in the second half, and explained how benefits from recent price actions and reduced foreign currency impacts will play a role.
- Michael Halloran (Baird): Sought clarity on channel inventory and backlog normalization; McAndrew responded that inventory levels are now normalized and seasonality is expected to follow typical patterns in 2026.
- Deane Dray (RBC Capital Markets): Asked about potential impacts of government shutdowns and federal funding; CEO Zakas said most funding comes from municipal sources and no direct impact has been seen, with federal infrastructure funds not expected to materially affect 2026 results.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team will be monitoring (1) the pace and impact of capital investments in iron foundries and digital customer experience projects, (2) execution of targeted pricing initiatives and their ability to offset tariff-related cost pressures, and (3) the resilience of municipal demand amid continued weakness in residential construction. Updates on the rollout of new products and progress toward margin expansion will also be closely tracked.
Mueller Water Products currently trades at $23.57, down from $25 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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