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Shares of Frequency Electronics, Inc. FEIM have gained 10.4% since the company reported its earnings for the quarter ended Jan. 31, 2025. This compares to the S&P 500 index’s 0.7% growth over the same time frame. Over the past month, the stock has declined 7.5% compared with the S&P 500’s 8.5% decrease.
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Frequency Electronics delivered a robust financial performance for its third quarter of fiscal 2025, with net income of $1.60 per share, a significant increase from 1 cent in the prior-year quarter.
Revenues reached $18.9 million, a 38% increase from $13.7 million in the prior-year period.
The company reported operating income of $3.5 million in the fiscal third quarter, a significant improvement from the $0.5 million operating loss in the prior year. Net income saw an even more substantial increase, reaching $15.4 million in the fiscal third quarter compared to $0.1 million in the year-ago period.
Frequency Electronics, Inc. Price, Consensus and EPS Surprise
Frequency Electronics, Inc. price-consensus-eps-surprise-chart | Frequency Electronics, Inc. Quote
Key Business Metrics
Gross margin improved substantially, climbing to 44% for the quarter from 23% in the prior-year quarter. This improvement was largely driven by revenue growth in the company’s core business areas and the successful execution of high-margin contracts.
Revenues from satellite payloads surged to $11.2 million (59% of total revenue) in the third quarter of fiscal 2025, up from $6.8 million (50%) in the year-ago period. In contrast, non-space U.S. Government and Department of Defense revenues declined to $7.4 million in the fiscal third quarter from $6 million a year earlier. Commercial and industrial revenue also saw a decline, totaling $0.4 million in the fiscal third quarter, down from $0.9 million in fiscal 2024.
The company’s backlog stood at $73 million as of Jan. 31, 2025, compared to $78 million at the end of fiscal 2024, indicating continued demand for its products.
Management Commentary and Strategic Outlook
CEO Thomas McClelland expressed optimism about the company’s trajectory, highlighting strong growth in core businesses and continued demand for FEIM’s technology. He noted that the quarter marked FEIM’s highest revenues in a decade, driven by the completion of key program milestones and the conversion of a historically high backlog into revenues.
Looking ahead, the company remains focused on expanding its presence in proliferated satellite programs and quantum sensing. Management anticipates additional contract wins over the next few quarters, though it acknowledged potential delays in government funding and contract awards due to federal workforce reductions.