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Shares of AstroNova, Inc. ALOT have lost 5.8% since the company reported its earnings for the quarter ended Nov. 2, 2024. This compares to the S&P 500 index’s -0.1% change over the same time frame. Over the past month, the stock moved 1.1% compared with the S&P 500’s 3% change.
The company reported a third-quarter fiscal 2025 net income of 6 cents per share on a non-GAAP basis compared with 37 cents per share last year.
AstroNova reported net revenues of $40.4 million for third-quarter fiscal 2025, up 7.7% from $37.5 million in the same quarter last year. However, GAAP net income dropped sharply to $0.2 million from $2.8 million a year ago, reflecting a 91.3% decline. On a non-GAAP basis, net income was $0.5 million compared with $2.8 million last year.
Gross margins contracted significantly, with GAAP gross margin declining to 33.9%, down from 39.4% in third-quarter fiscal 2024, due to higher operating costs and an unfavorable product mix.
Operating margins also declined, with the GAAP operating margin declining to 3.1%, a steep drop from 12.3% in the prior-year quarter. Adjusted EBITDA fell 43%, from $5.7 million to $3.2 million, highlighting profitability challenges despite top-line growth.
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AstroNova, Inc. Price, Consensus and EPS Surprise
AstroNova, Inc. price-consensus-eps-surprise-chart | AstroNova, Inc. Quote
Segment Performance and Business Metrics
Product Identification Segment (PI):
Revenues in the PI segment were $26.3 million, slightly down from $26.5 million a year ago. This was due to delayed product launches and weaker European sales. The segment's operating income dropped significantly to $1.9 million (7.1% margin) from $4.8 million (18.1% margin) in third-quarter fiscal 2024. The decrease was due to acquisition-related costs, reduced sales volumes, and higher expenses tied to the MTEX integration.
Test & Measurement Segment (T&M):
Revenues in the T&M segment grew 28.2% year over year to $14.1 million, driven by strong performance in the Aerospace product line despite temporary setbacks from a two-month Boeing strike. Segment operating income increased to $3.3 million (23% margin) from $2.6 million (23.2% margin) a year ago.
Bookings for the quarter were $37.6 million, up from $35.5 million in the prior year, while backlog decreased to $27.1 million from $31.2 million.
Management Commentary
CEO Greg Woods acknowledged disappointing profitability in the quarter, citing challenges related to the MTEX NS acquisition and delays in a major inkjet printer order. The MTEX integration has proven more resource-intensive than anticipated, with MTEX posting an operating loss of $1.1 million on $1.7 million in revenues. AstroNova has reorganized MTEX’s reporting structure and launched a company-wide cost reduction and product rationalization initiative, which is expected to continue through mid-2025.