On August 7, 2024, ESCO Technologies Inc (NYSE: ESE) released its 8-K filing reporting its third-quarter fiscal 2024 results. ESCO Technologies Inc sells engineered products and systems for utility, industrial, aerospace, and commercial applications. The firm operates in three segments: Aerospace and Defense, Utility Solutions Group (USG), and RF Shielding and Test (Test).
Performance Highlights
ESCO Technologies Inc (ESE, Financial) reported a 46% increase in Q3 orders to $312 million, with a book-to-bill ratio of 1.20x. Sales for the quarter rose by 5% to $261 million, below the estimated revenue of $269.26 million. GAAP EPS increased by 5% to $1.13, missing the analyst estimate of $1.15. Adjusted EPS grew by 6% to $1.16.
Bryan Sayler, Chief Executive Officer and President, commented, “Q3 was highlighted by over $300 million in orders, with strength across all three segments. The increase was driven by large Navy orders, continuing strength in aerospace and electric utility orders, and importantly a rebound in both Test and renewables orders. Revenue grew 5 percent in the quarter and Adjusted EBITDA margin expanded by 60 basis points, driving a 6 percent increase in Adjusted EPS compared to the prior year quarter. Overall, it was a solid quarter as we continue to see favorable momentum across our aerospace, Navy and utility end markets.”
Segment Performance
The Aerospace & Defense segment reported net sales of $114.45 million, up from $103.47 million in Q3 2023. The Utility Solutions Group (USG) saw a slight increase in sales to $90.28 million from $89.97 million. The Test segment reported sales of $56.06 million, up from $55.31 million in the same period last year.
Financial Achievements
ESCO Technologies Inc (ESE, Financial) achieved a consolidated EBIT of $40.51 million, up from $38.00 million in Q3 2023. The company's Adjusted EBITDA margin expanded by 60 basis points, reflecting improved operational efficiency. The company also repurchased approximately 8,000 shares for $0.8 million during the quarter.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $260.78 million | $248.75 million |
| Cost of Sales | $157.44 million | $147.27 million |
| SG&A Expenses | $54.96 million | $55.38 million |
| Net Earnings | $29.23 million | $27.94 million |
| GAAP EPS | $1.13 | $1.08 |
| Adjusted EPS | $1.16 | $1.09 |
Strategic Moves and Outlook
ESCO Technologies Inc (ESE, Financial) announced the acquisition of the Signature Management & Power (SM&P) business of Ultra Maritime for $550 million, expected to close in Q1 fiscal 2025. This acquisition aims to enhance the company's Navy business and expand its presence in the UK and AUKUS navy platforms.
Management expects Q4 Adjusted EPS to range between $1.38 and $1.48, resulting in full-year guidance of $4.10 to $4.20. This outlook represents the company's third consecutive year of double-digit earnings growth.
Conclusion
ESCO Technologies Inc (ESE, Financial) demonstrated solid performance in Q3 2024, with significant order growth and modest increases in sales and EPS. The company's strategic acquisition and favorable outlook indicate continued momentum in its key markets. For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from ESCO Technologies Inc for further details.
