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Shares of The Eastern Company EML have gained 9.4% since the company reported its earnings for the quarter ended March 29, 2025. This compares with the S&P 500 index’s 0.2% decline over the same time frame. Over the past month, the stock has gained 2.6% compared with the S&P 500’s 4.4% growth.
Eastern posted first-quarter 2025 earnings per share from continuing operations of 31 cents, down from 34 cents a year earlier. Adjusted earnings per share slipped to 32 cents from 34 cents a year ago. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company’s net sales from continuing operations of $63.3 million denoted a 2% decrease compared to $64.6 million in the year-ago period. Adjusted EBITDA also declined modestly to $4.6 million from $4.8 million a year ago, reflecting ongoing market headwinds, particularly in the heavy-duty truck segment.
The Eastern Company Price, Consensus and EPS Surprise
The Eastern Company price-consensus-eps-surprise-chart | The Eastern Company Quote
Other Key Business Metrics
Eastern’s gross margin in the quarter was 22.4%, down from 23.9% in the same quarter last year. The company attributed this decline to higher raw material costs, partially offset by pricing actions. Meanwhile, selling, general and administrative (SG&A) expenses dropped by $0.8 million, or 8%, to $9.8 million. This decrease was driven by lower payroll-related expenses, partially offset by increased sales commissions. As a percentage of net sales, SG&A costs improved to 15.6% from 16.5% in the prior-year period.
Operating income was $3.2 million, slightly lower than $3.4 million in the prior year. Net income from continuing operations stood at $1.9 million compared to $2.1 million in the year-ago period. On the cash flow front, the company used $1.8 million in operating activities, down from a positive $2.8 million in the prior year, reflecting significant changes in working capital and lease-related adjustments.
Management Commentary
CEO Ryan Schroeder described the first quarter as a period of “significant change,” with the new leadership team focusing on sales growth, cost reduction, and operational efficiency. He acknowledged the challenging macroeconomic environment, particularly the slowdown in the heavy-duty truck market, which pressured the company’s performance and backlog. Nevertheless, Schroeder emphasized Eastern’s strategy to remain agile, defend margins, and leverage its entrepreneurial culture to build product roadmaps and explore acquisition opportunities.
Chairman James Mitarotonda echoed this sentiment, commending management for accelerating execution and positioning the company for long-term success. The board's confidence was underscored by a new share repurchase program, authorizing the buyback of up to 400,000 shares over the next five years, doubling the size of the recently completed program.