What happened

Zurn Elkay Water Solutions (ZWS -1.24%) divulged its first quarterly results as a recently merged entity on Wednesday, but the occasion wasn't auspicious. While the company more or less met analyst expectations, forward-looking investors didn't like what they saw on the horizon, and the shares took an 11% hit on the day.

So what

Zurn Elkay, the result of a merger between the two namesake companies, fused together officially this past July 1. For the new entity's third quarter, its first under the new combination, it posted net sales of $418 million, an 82% improvement over the pro forma $230 million in the same period last year.

Non-GAAP (adjusted) net income also saw a boost, rising sharply from $24 million in the third quarter of 2021 to over $45 million, or $0.26 per share.

This was more or less what analysts tracking Zurn Elkay were expecting. Although they had collectively estimated net sales would amount to nearly $422 million, they were spot on with an average $0.26 per share for adjusted net income.

The company's performance met its own expectations too, both for its legacy Zurn operations and as a merged business. It quoted its CEO, Todd Adams, as saying, "We've made an enormous amount of progress on the integration over the first 90 days and we are quickly becoming a single integrated business moving with speed, focus and confidence."

Now what

Yet Zurn Elkay's fourth-quarter guidance, such as it is, seems to betray that confidence a bit.

Although the company feels it is well positioned in the North American market, it worries that "customer sentiment and market behavior will be more volatile, particularly heading into a year-end and what appears to be a deteriorating macro-environment," in Adams' words.

As a result, it trimmed its guidance for the period; it now expects sales to total $350 million to $365 million. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins should land between 20% and 21%.