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Atkore Inc. (ATKR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 results were broadly in line with management’s November outlook: Net sales $0.662B, Adjusted EBITDA $99.2M, and Adjusted diluted EPS $1.63; GAAP diluted EPS was $1.31 .
  • Year-over-year comparisons were weaker on price and volume: net sales down 17.1%, Adjusted EBITDA down 53.6%, Adjusted diluted EPS down 60.4% (PVC and steel conduit pricing pressure, import competition) .
  • Guidance cut: FY 2025 Adjusted EBITDA lowered to $375–$425M (from $475–$525M) and Adjusted diluted EPS to $5.75–$6.85 (from $7.80–$8.90); Q2 2025 guidance set at net sales $685–$715M, Adjusted EBITDA $85–$95M, and Adjusted EPS $1.30–$1.50 .
  • Capital returns remained active: $50M buyback and a $0.32 dividend declared for Q1; management reiterated a balanced deployment model and later raised the quarterly dividend to $0.33 in Q2 .

What Went Well and What Went Wrong

What Went Well

  • Mid-single-digit growth in Metal Framing, Cable Management & Construction Services despite tough comps; management expects continued momentum tied to data centers and megaprojects .
  • Operational improvement at Hobart (solar torque tube) and S&I segment sequential margin progress versus Q4 2024 .
  • Cash returns sustained: $50M repurchases and quarterly dividend declared, underscoring ongoing capital return commitment .
  • Quote (CEO): “Our Q1 performance was in line with our expectations… we are on track with our organic initiatives… for PVC and HDPE water products” .

What Went Wrong

  • Broad price deflation and import competition: average selling prices fell ~12%; PVC imports grew >20% YoY (still single-digit market share), pressuring spreads and necessitating a more conservative outlook .
  • Electrical segment margin compression: Adjusted EBITDA margin fell to 19.9% (vs 34.4% YoY) on pricing and volume declines; S&I also saw YoY margin decline to 7.9% .
  • Management cut FY 2025 guidance amid headwinds; price vs cost headwind delta vs November widened by ~$100M, ~75% tied to PVC, ~25% to steel conduit (CFO breakdown) .
  • Quote (CEO): “We have pricing down to pre-COVID levels by the time we exit the year… instead of saying, we didn’t expect it, we’ve taken a very aggressive view for price declines” .

Financial Results

Consolidated Results vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$822.4 $788.3 $661.6
Diluted EPS ($)$3.33 $2.02 $1.31
Adjusted Diluted EPS ($)$3.80 $2.43 $1.63
Adjusted EBITDA ($USD Millions)$206.1 $140.2 $99.2
Adjusted EBITDA Margin (%)25.1% 17.8% 15.0%
Gross Margin (%)34.0% 27.4% 25.9%

Year-over-Year Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentNet Sales Q1 2024 ($M)Net Sales Q1 2025 ($M)Adjusted EBITDA Q1 2024 ($M)Adjusted EBITDA Q1 2025 ($M)Adj. EBITDA Margin Q1 2024 (%)Adj. EBITDA Margin Q1 2025 (%)
Electrical$593.7 $465.4 $204.4 $92.4 34.4% 19.9%
Safety & Infrastructure$205.1 $196.7 $19.5 $15.6 9.5% 7.9%

KPIs and Cash Flow (Q1 2025 vs Q1 2024)

KPIQ1 2024Q1 2025
Gross Margin (%)36.4% 25.9%
Operating Income ($USD Millions)$175.5 $67.9
Tax Rate (%)17.5% 20.9%
Free Cash Flow ($USD Millions)$113.8 $33.1
Net Debt ($USD Millions, period-end)$382.3 (12/29/2023) $454.9 (12/27/2024)

Actual vs Outlook/Estimates (Q1 2025)

MetricCompany Outlook (Nov 21)Actual (Q1 2025)Versus OutlookStreet Consensus
Net Sales ($M)$655–$705 $661.6 In range N/A – S&P Global consensus unavailable today
Adjusted EBITDA ($M)$95–$105 $99.2 In range N/A – S&P Global consensus unavailable today
Adjusted Diluted EPS ($)$1.45–$1.65 $1.63 Near top end N/A – S&P Global consensus unavailable today

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($M)FY 2025$475–$525 $375–$425 Lowered
Adjusted Diluted EPS ($)FY 2025$7.80–$8.90 $5.75–$6.85 Lowered
Net Sales ($B)FY 2025$2.9–$3.2 $2.85–$2.95 (midpoint shown) Slightly lowered midpoint
Net Sales ($M)Q2 2025—$685–$715 New
Adjusted EBITDA ($M)Q2 2025—$85–$95 New
Adjusted Diluted EPS ($)Q2 2025—$1.30–$1.50 New
Interest Expense ($M)FY 2025~$38–$42 $38–$42 (maintained) Maintained
Tax Rate (%)FY 2025~24–26 ~23–25 Slightly lower range
Capital Expenditures ($M)FY 2025$100–$125 $100–$125 (maintained) Maintained
Stock Repurchases ($M)FY 2025≥$150 ≥$150 (maintained) Maintained
Dividend per shareQ1 2025$0.32 (declared Jan 30, 2025) Paid Feb 28, 2025 Ongoing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
PVC/Steel import competition & pricingImport pressures rising; pricing normalization expected PVC imports >20% YoY growth (single-digit market share) pressuring prices; price vs cost headwinds intensify Worsening
Tariffs/macroPotential upside from government intervention; secular drivers intact Management expects potential positive impact from tariffs on Mexico; outlook excludes benefit Potential tailwind
Water-related products (PVC/HDPE)Expansion focus; HDPE telecom softness On track to bring PVC/HDPE water capacity online later FY25 Improving medium term
Global megaprojects/data centersGrowth led by megaprojects; investing in construction services Metal framing/Construction Services grew mid-single digits; pipeline development underway Improving
Solar/Hobart executionSequential production improvements; IRA supports domestic torque tube Operational performance improved; downstream constraints impacted utility-scale solar volumes Mixed
Capital deployment (buybacks/dividends)Strong FY24 cash returns; dividend program initiated $50M buybacks and $0.32 dividend in Q1; dividend increased to $0.33 in Q2 Ongoing returns

Management Commentary

  • Strategic focus: “We are on track with our organic initiatives… to support both our PVC and HDPE water products… we continue to pursue several opportunities for global mega projects” (CEO, prepared remarks) .
  • Pricing reality: “We put [pricing] down to pre-COVID levels by the time we exit the year… we’ve taken a very aggressive view for price declines” (CEO) .
  • Guidance realism: “We now expect full year 2025 adjusted EBITDA to be approximately $400 million at the midpoint… outlook does not contemplate any material benefit from tariffs on imported conduit” (CEO) .
  • Quality concerns: “We tested [a significant importer]… required 7 out of 10 impacts… they’re passing 1 out of 10” (CEO) .
  • Segment strength: “Metal framing, cable management and construction services… mid-single-digit growth… driven by data centers and large manufacturing projects” (CFO) .

Q&A Highlights

  • PVC imports and price normalization: Management cited >20% YoY growth in PVC imports (still single-digit market share) and adopted a conservative stance assuming pre-COVID pricing by year-end; any tariff or quota upside would be incremental to guidance .
  • Guidance cut attribution: CFO quantified ~$100M incremental price vs cost headwind vs November, ~75% PVC and ~25% steel conduit, driving FY25 guidance reduction .
  • Cost structure actions: Facility consolidation (e.g., Tempe closed with operations moved), sale of 2–3 production lines, headcount controls, and targeted line trade-offs to improve economic return (CEO and CFO) .
  • Growth initiatives: Expect volume growth in metal framing/construction services tied to data centers and megaprojects; water-related products to be the next driver in 2H FY25 (CFO) .
  • Solar/Hobart: Operations performing to speed/productivity expectations; market constraints on grid connection timing noted; longer-term solar demand remains attractive (CEO) .

Estimates Context

  • Street consensus via S&P Global could not be retrieved today; as a result, we cannot provide vs-consensus comparisons for Q1 2025 or Q2 2025. The company’s Q1 actuals were within its prior outlook ranges, and FY 2025 guidance was lowered to Adjusted EBITDA $375–$425M and Adjusted EPS $5.75–$6.85, which implies sell-side models will likely align with this updated framework; note that consensus data was unavailable at the time of analysis .

Key Takeaways for Investors

  • Pricing headwinds are the core issue: PVC and steel conduit price normalization, amplified by import competition, drove significant YoY margin compression; management has embedded a conservative price trajectory through FY25 .
  • Guidance is reset; execution is key: FY25 Adjusted EBITDA/EPS lowered, with H2 expected stronger on seasonality and initiatives; near-term results will hinge on sequential improvement and initiative ramp .
  • Structural growth vectors intact: Data center and megaproject exposure is translating into measurable growth in metal framing and construction services; water-related PVC/HDPE capacity additions targeted for later FY25 .
  • Potential policy tailwinds: Tariffs on imports (Mexico/Canada/China/LatAm) could benefit domestic producers like Atkore; current guidance does not assume material tariff benefit, presenting optionality .
  • Capital discipline continues: Ongoing buybacks and dividends, robust liquidity, and manageable maturities underpin flexibility amid pricing cycles .
  • Watch quality/regulatory narratives: Management raised import product quality/spec concerns—any enforcement or regulatory action could alter competitive dynamics and pricing spreads .
  • Near-term trading lens: Stock reaction may be sensitive to signs of price stabilization, tariff implementation, and visible backlog growth in data centers/megaprojects; Q2 guide sets expectations for modest sequential improvement while pricing headwinds persist .

Additional Primary Source References

  • Q1 2025 8-K and press release (full financial statements, segment details, guidance) .
  • Q1 2025 earnings call transcript (management narrative, Q&A specifics, guidance commentary) .
  • Prior two quarters for trend analysis: Q4 2024 8-K (outlook and results) ; Q3 2024 8-K (pricing normalization, segment, bridges) .