Water infrastructure products manufacturer Mueller Water Products announced better-than-expected revenue in Q2 CY2025, with sales up 6.6% year on year to $380.3 million. The company’s full-year revenue guidance of $1.41 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $0.34 per share was in line with analysts’ consensus estimates.
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Mueller Water Products (MWA) Q2 CY2025 Highlights:
- Revenue: $380.3 million vs analyst estimates of $367.7 million (6.6% year-on-year growth, 3.4% beat)
- Adjusted EPS: $0.34 vs analyst estimates of $0.34 (in line)
- Adjusted EBITDA: $86.4 million vs analyst estimates of $88.4 million (22.7% margin, 2.3% miss)
- The company lifted its revenue guidance for the full year to $1.41 billion at the midpoint from $1.40 billion, a 1.1% increase
- EBITDA guidance for the full year is $320 million at the midpoint, above analyst estimates of $313.3 million
- Operating Margin: 19.4%, in line with the same quarter last year
- Free Cash Flow Margin: 14.6%, down from 21.1% in the same quarter last year
- Market Capitalization: $3.80 billion
“We achieved an impressive third quarter, setting new records for consolidated net sales, gross margin and adjusted EBITDA, even amidst heightened macroeconomic and geopolitical uncertainty. Our gross margin exceeded 38% this quarter, reflecting a significant sequential improvement of 320 basis points. Our teams executed well, capitalizing on higher-than-expected order levels and driving manufacturing efficiencies, despite the challenges posed by the recently enacted tariffs. We are pleased with the expected positive impact of closing our legacy brass foundry, which has contributed to our overall success,” said Martie Edmunds Zakas, Chief Executive Officer of Mueller Water Products.
Company Overview
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE:MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Mueller Water Products grew its sales at a decent 7.7% compounded annual growth rate. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Mueller Water Products’s recent performance shows its demand has slowed as its annualized revenue growth of 3.4% over the last two years was below its five-year trend. 
This quarter, Mueller Water Products reported year-on-year revenue growth of 6.6%, and its $380.3 million of revenue exceeded Wall Street’s estimates by 3.4%.
Looking ahead, sell-side analysts expect revenue to grow 3.7% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its newer products and services will not lead to better top-line performance yet.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
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, boasting an average operating margin of 12.5%.
Analyzing the trend in its profitability, Mueller Water Products’s operating margin rose by 2.3 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q2, Mueller Water Products generated an operating margin profit margin of 19.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
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 sales through excessive spending on advertising and promotions.
Mueller Water Products’s EPS grew at a spectacular 16.8% compounded annual growth rate over the last five years, higher than its 7.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into Mueller Water Products’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Mueller Water Products’s operating margin was flat this quarter but expanded by 2.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Mueller Water Products, its two-year annual EPS growth of 44.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q2, Mueller Water Products reported adjusted EPS at $0.34, up from $0.32 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Mueller Water Products’s full-year EPS of $1.15 to grow 13.9%.
Key Takeaways from Mueller Water Products’s Q2 Results
We enjoyed seeing Mueller Water Products beat analysts’ revenue expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its EBITDA missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $23.94 immediately following the results.
So should you invest in Mueller Water Products right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.