Atkore beats earnings estimates, raises full-year outlook
Q1 EPS of $0.83 tops consensus by 29.7% as electrical segment growth offsets infrastructure decline
Atkore International Group Inc. exceeded Wall Street expectations in its fiscal first quarter, delivering adjusted earnings per share of $0.83 that topped analyst estimates by nearly 30%, while maintaining full-year guidance that suggests confidence in an infrastructure recovery.
The Illinois-based manufacturer of electrical conduit and mechanical solutions reported revenue of $655.5 million for the quarter ended December 31, narrowly surpassing the $650.1 million consensus forecast. However, net sales declined 0.9% from the prior year, reflecting ongoing challenges in certain end markets even as the electrical segment showed resilience.
According to the earnings results, Atkore's Electrical segment posted a 0.9% increase in net sales to $469.6 million, while the Safety & Infrastructure division struggled with a 5.3% decline to $186.3 million. The mixed performance underscores the divergence between commercial and residential construction markets that has characterized much of the past year.
Net income for the quarter fell 67.6% to $15 million from the same period a year earlier, while adjusted EBITDA decreased to $69.1 million. The profit compression reflects margin pressure from raw material costs and ongoing operational adjustments as the company navigates a complex demand environment.
Despite the year-over-year decline in profitability, Atkore's earnings per share significantly outperformed analyst projections. The $0.83 per share result beat the consensus estimate of $0.64 by 19 cents, or 29.7%, demonstrating the company's ability to manage expenses and improve operational efficiency even amid top-line pressures.
For fiscal 2026, Atkore maintained guidance for adjusted EPS in the range of $5.05 to $5.55, with the midpoint of $5.30 sitting above the analyst consensus of $5.18. The company also projects adjusted EBITDA of $340 million to $360 million and full-year net sales of $3.0 billion to $3.1 billion.
"We are pleased with our first quarter performance, particularly the margin improvement in our Electrical segment," Atkore's management stated in the earnings release. "Our team executed well in a challenging environment, and we remain confident in our ability to drive profitability as market conditions normalize."
The company's board approved a quarterly dividend of $0.33 per share, payable February 27 to shareholders of record as of February 17. The annualized dividend represents a 1.85% yield at the current stock price.
Shares of Atkore closed at $70.06 on Monday and showed minimal movement in pre-market trading following the earnings announcement, reflecting investor caution about the company's growth trajectory despite the earnings beat. The stock has traded in a 52-week range of $49.15 to $79.20, reflecting significant volatility amid shifting market sentiment about industrial and construction exposure.
Analysts maintain a "Hold" consensus rating on Atkore, with an average price target of approximately $65.80, suggesting modest downside from current levels. According to Simply Wall St's valuation analysis, the stock may be overvalued by as much as 159% relative to its intrinsic value based on discounted cash flow calculations.
The muted market reaction highlights investor skepticism about whether Atkore can sustain earnings momentum through fiscal 2026, particularly given the mixed signals across its two business segments. While electrical infrastructure spending has benefited from data center expansion and renewable energy investments, the broader construction market continues to face headwinds from elevated interest rates and uncertain commercial real estate conditions.
Atkore's forward price-to-earnings ratio of approximately 13.8 times earnings suggests the market has already priced in expectations of a recovery, making execution against guidance increasingly important for the stock to deliver further upside. With 95.6% of shares held by institutional investors, sentiment among professional money managers will likely be the key driver of near-term price action.
Looking ahead, investors will focus on whether Atkore can return to year-over-year revenue growth in subsequent quarters, particularly in the Safety & Infrastructure segment, which has been the primary drag on performance. Management's ability to maintain margins while navigating potential raw material inflation and competitive pricing pressures will also be critical factors in determining whether the company can meet the upper end of its full-year guidance range.