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Shares of Sypris Solutions, Inc. SYPR have gained 2.9% since the company reported its earnings for the quarter ended Sept. 29, 2024. This compares to the S&P 500 index's -0.3% change over the same period. Over the past month, however, Sypris stock moved -7.3%, against the S&P 500's gain of 3.3%, indicating a mixed sentiment among investors despite the quarterly report.
For the third quarter of 2024, Sypris reported a net income of $0.4 million, translating to an earnings per share (EPS) of 2 cents, against the net loss of $0.6 million, or a loss of 3 cents per share, in the prior-year quarter.
The company reported revenues of $35.7 million, a 6.2% increase from the $33.6 million recorded in the prior-year quarter. This growth was primarily driven by a 13.6% rise in revenues for the Sypris Electronics segment, which benefited from recent contract wins in markets including electronic warfare, subsea communications, and avionics for both aircraft and missiles. Sypris Technologies also contributed with a modest 0.7% increase in revenues.
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Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Sypris Solutions, Inc. price-consensus-eps-surprise-chart | Sypris Solutions, Inc. Quote
Other Key Business Metrics
Gross profit for Sypris climbed 48% year over year, supported by a 480-basis-point improvement in gross margin. The increase in profitability was bolstered by favorable product mix and currency exchange rates. Specifically, Sypris Technologies saw a 150.9% year-over-year surge in gross profit, contributing to an 18.8% gross margin for the segment compared with 7.5% a year ago. Meanwhile, Sypris Electronics experienced a slight dip in gross margin to 14.3% from 18.1% in the previous year, impacted by additional labor and overhead costs.
Management Commentary
Jeffrey T. Gill, president and CEO, expressed optimism over the growth in Sypris Electronics, citing a robust backlog exceeding $100 million. He noted that funding had been secured for key customer programs, enabling the company to mitigate future supply chain risks. The outlook for Sypris Technologies appeared stable as demand remained consistent across markets like automotive, commercial vehicles, and sport utility sectors, with new product lines helping to offset the expected cyclical downturn in commercial vehicles. Additionally, the company observed an uptick in energy-related product orders, driven by global LNG demand and other new opportunities in adjacent markets like CO2 capture.