Albany’s first quarter results were met with a negative market reaction, as the company’s sales declined amid ongoing operational shifts. Management attributed the revenue shortfall to reduced volumes in its Engineered Composites segment and lower sales within Machine Clothing, driven by targeted divestitures and customer-specific softness. CEO Gunnar Kleveland noted, “Machine Clothing continues to deliver consistent strong results and the integration of Heimbach is proceeding to plan,” but cautioned that certain program-specific adjustments and restructuring actions weighed on performance.
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Albany (AIN) Q1 CY2025 Highlights:
- Revenue: $288.8 million vs analyst estimates of $294.1 million (7.8% year-on-year decline, 1.8% miss)
- Adjusted EPS: $0.73 vs analyst estimates of $0.62 (17.4% beat)
- Adjusted EBITDA: $55.72 million vs analyst estimates of $54.09 million (19.3% margin, 3% beat)
- The company reconfirmed its revenue guidance for the full year of $1.22 billion at the midpoint
- Adjusted EPS guidance for the full year is $3.20 at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $250 million at the midpoint, below analyst estimates of $252.4 million
- Operating Margin: 9.8%, down from 12.4% in the same quarter last year
- Market Capitalization: $2.07 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Albany’s Q1 Earnings Call
- Peter Arment (Baird) asked about Albany’s readiness to meet higher production rates for LEAP engines. CEO Gunnar Kleveland explained that while inventory is being utilized in the first half, capacity is in place to respond to demand increases later in the year.
- Peter Arment (Baird) inquired about new business opportunities in the aerospace backlog, including classified programs. Kleveland highlighted growth potential in space, missile programs, and both Boeing and Airbus engine platforms, stating that technology differentiation guides the company’s pursuit of new contracts.
- Michael Ciarmoli (Truist Securities) pressed for details on the risk profile and margin expectations for the Bell 525 contract. Kleveland emphasized selective program participation and projected high-teen margins for the Engineered Composites segment.
- Michael Ciarmoli (Truist Securities) queried about the outlook for LEAP revenues and potential upside. Management maintained a cautious stance but acknowledged the possibility for incremental growth if aircraft production ramps up during the year.
- Chigusa Katoku (JPMorgan) questioned the organic growth outlook for Machine Clothing amid macro uncertainty. Kleveland clarified that divestitures and discontinued product lines contributed to short-term weakness, but order backlog and current trends support a stronger second and third quarter.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace and scale of cost synergies realized from the Heimbach integration, (2) evidence of improving sales volumes and operational leverage in the Engineered Composites segment as aerospace markets recover, and (3) the company’s ability to manage input cost pressures and potential tariff or supply chain disruptions. Sustained backlog strength and successful execution of new program wins will also be key indicators of future performance.
Albany currently trades at $68.43, up from $65.61 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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