U.S. stocks edge higher; solid earnings season continues
Investing.com -- Shares of Atkore Inc (NYSE:ATKR) plummeted 15% after the company reduced its profit forecast for fiscal year 2025, signaling potential challenges ahead. The adjusted earnings per share (EPS) projection was lowered to a range of $5.75 to $6.85, well below the consensus estimate of $8.38.
Atkore reported first-quarter earnings per share of $1.63, slightly above the analyst estimate of $1.59. However, quarterly revenue fell short at $661.6 million, compared to the expected $681.12 million. This represents a 17.1% decrease in net sales compared to the same period last year, primarily due to lower average selling prices and reduced sales volume across the company’s product lines.
The company’s net income saw a significant drop, decreasing by $92.0 million, or 66.5%, to $46.3 million for the quarter ended December 27, 2024, from the previous year. Adjusted EBITDA also fell sharply by $114.4 million, or 53.6%, to $99.2 million. Atkore’s gross profit suffered as well, with a decrease of 41.1% to $171.1 million, and gross margin contracted to 25.9% from 36.4% in the prior-year period.
In response to the earnings report and guidance revision, Keybank analyst Jeffrey D. Hammond commented, "All in, we expect shares to trade lower in today’s session as another reset on softer price/cost adds fuel to the pricing normalization bear thesis." This statement reflects the market’s reaction to Atkore’s announcement, as investors adjust their expectations in light of the new financial outlook.
Atkore’s President and CEO, Bill Waltz, pointed out that the first-quarter results were in line with projections presented in November, with net sales from metal framing, cable management, and construction services product areas increasing mid-single digits from the prior year. Despite the positive performance in these areas, the company faces headwinds in the competitive landscape and is adjusting its strategy accordingly.
As Atkore navigates through fiscal 2025, the focus remains on executing its strategy and investing in the future, with an emphasis on growth initiatives related to water and global construction services.
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