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RACINE, Wis. - Modine Manufacturing (NYSE:MOD) shares jumped 9% after the thermal management technology provider reported first-quarter earnings that exceeded analyst expectations, driven by strong data center product sales and recent acquisitions.
The company reported adjusted earnings per share of $1.06 for the quarter ended June 30, beating analyst estimates of $0.95. Revenue reached $682.8 million, surpassing the consensus estimate of $652.76 million and representing a 3% increase YoY.
Modine’s Climate Solutions segment led the growth with an 11% sales increase to $397.4 million, bolstered by higher data center product sales and $10 million in revenue from recent acquisitions. Meanwhile, the Performance Technologies segment saw an 8% decline to $285.5 million due to market weakness in vehicular end markets and strategic product line exits.
"We are making important investments in our business that are advancing our competitive position in key markets and allowing us to capture incremental growth opportunities this fiscal year and beyond," said Neil D. Brinker, Modine’s President and CEO.
The company raised its fiscal 2026 outlook, now projecting net sales growth of 10% to 15% and adjusted EBITDA between $440 million and $470 million, representing growth of 12% to 20%.
Modine’s gross margin decreased slightly by 40 basis points to 24.2%, primarily due to lower margins in the Performance Technologies segment, which faced higher material costs.
Net earnings increased 8% to $51.7 million compared to $47.8 million in the prior year, while adjusted EBITDA rose marginally to $101.4 million from $100.9 million.
The company also announced plans to expand its North American manufacturing capacity for data center products, which Brinker said "provides a clear path to approach $2 billion in data center revenues by fiscal 2028."
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