Shares of Gorman-Rupp (NYSE: GRC) plummeted 7.49% in pre-market trading on Friday following the release of the company's third-quarter earnings report, which fell short of analyst expectations. The water pump manufacturer's disappointing results have sparked concerns among investors about the company's performance amid rising costs.
Gorman-Rupp reported adjusted earnings per share of $0.52 for the quarter, missing the consensus estimate of $0.56 by 7.96%. While this represents a 6.12% increase from the same period last year, it wasn't enough to meet market expectations. Revenue for the quarter came in at $172.83 million, up 2.8% year-over-year but still falling short of the anticipated $174.61 million.
The company's underperformance can be attributed to higher costs and ongoing facility optimization efforts. Gorman-Rupp incurred $3 million in one-time facility costs during the quarter, which impacted their bottom line. However, the company expects these optimization efforts to result in annual savings of $2-$2.5 million in payroll and facility expenses moving forward. Despite these challenges, Gorman-Rupp remains optimistic about its future, citing strong incoming orders and an increasing backlog for 2025 and 2026. The company also announced a 2.7% increase in its quarterly dividend, signaling confidence in its long-term financial health.
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