Preformed Line Products Q3 Earnings Fall, Sales Jump 21% Y/Y

Shares of Preformed Line Products Company PLPC have lost 9.7% since reporting results for the third quarter of 2025. This compares to the S&P 500 index’s 0.6% decline over the same period. However, over the past month, PLPC shares have advanced 7.4%, outperforming the S&P 500’s 1.9% growth, suggesting that recent investor sentiment has improved despite short-term weakness following the quarterly results.

The company’s third-quarter 2025 results reflected a mix of solid top-line growth and bottom-line headwinds from one-time and tariff-related costs. Net sales rose 21% to $178.1 million from $147 million in the same quarter of 2024, driven by growth across all product markets and geographic segments.

However, net income plummeted 66% to $2.6 million, or 53 cents per diluted share, from $7.7 million, or $1.54 per share. This decline primarily reflected an $11.7-million non-cash pre-tax charge associated with the termination of the company’s U.S. pension plan. Excluding that charge, adjusted diluted EPS was $2.09, up 36% from the prior year’s $1.54, underscoring the strength of the company’s operating fundamentals. Gross profit increased 15% to $52.8 million, but the gross margin slipped 140 basis points to 29.7% mainly due to tariffs and associated LIFO valuation effects.

Preformed Line Products Company Price, Consensus and EPS Surprise

 

Preformed Line Products Company price-consensus-eps-surprise-chart | Preformed Line Products Company Quote

Other Key Business Metrics

Preformed Line Products delivered broad-based revenue growth across all segments. The energy segment rose 21% year over year, the Americas posted 57% growth and the EMEA region moved up 25%. The Asia-Pacific region expanded 38%, aided by higher data cabinet sales, while the communications segment grew 16%, supported by stronger fiber closure demand and the JAP Telecom acquisition completed earlier in 2025.

The U.S. and international businesses contributed meaningfully to these gains, with PLP-USA up 23% and Americas up 48%. The recently acquired JAP Telecom added $2.3 million in sales in the quarter. Despite tariff headwinds, the company maintained a robust liquidity position, ending the quarter with $72.9 million in cash and 87% availability under its global credit facility.

The Free cash flow totaled $8.5 million for the quarter, up from $5.9 million a year earlier, reflecting working capital improvements. The company reported a trailing 12-month free cash flow conversion of 94%, indicating continued efficiency in converting earnings to cash.

Management Commentary

Executive chairman Rob Ruhlman highlighted the company’s continued sales momentum across both energy and communication markets. He emphasized that growth was “global,” with increases in all segments contributing to year-over-year gains. However, Ruhlman acknowledged that recently enacted tariffs had created cost pressures and uncertainty in customer demand. PLPC has responded by implementing selling price increases intended to offset these higher input costs, although management noted that the price adjustments “currently lag” the tariff-related costs in the income statement.

Ruhlman also underscored the completion of the U.S. pension plan termination through the purchase of a group annuity contract as “another significant step in strengthening and de-risking our balance sheet.” This initiative reduced long-term pension liabilities and supports the company’s focus on maintaining financial flexibility.

Factors Influencing the Headline Numbers

The sharp decline in reported earnings primarily stemmed from one-time pension termination expenses, which reduced pre-tax income by $11.7 million and diluted EPS by $1.56 per share after tax. Tariffs on imported goods for PLP-USA operations added to cost pressures, contributing to $3.8-million pre-tax impacts in the quarter. The combination of these factors compressed margins despite higher sales volumes and lower interest expenses.

Still, adjusted results demonstrated underlying resilience. Adjusted pre-tax income margin was approximately 7% after excluding the pension impacts, consistent with recent trends. On a year-to-date basis, net sales rose 16% to $496.2 million, while adjusted net income climbed 30% to $34.6 million, further confirming strong operational performance once non-recurring charges are stripped out.

Guidance

The company did not provide explicit quantitative guidance for the upcoming quarter or fiscal year. However, management’s remarks pointed to continued end-market strength and a cautious view of tariff-related uncertainty. The backlog and order quoting trends were described as positive indicators of sustained demand. PLPC also expects gradual margin recovery as selling price adjustments take fuller effect in subsequent quarters.

Other Developments

In the quarter, PLPC continued to invest in expanding its manufacturing footprint. The company entered a $27.6-million loan agreement on July 16, 2025, to finance the construction of a manufacturing facility in Poland, with $7.7 million drawn as of Sept. 30, 2025. It also acquired land and a building in Spain to support future growth in Europe. These capital projects elevated capital expenditure to $10.6 million in the quarter.

Additionally, the company’s balance sheet remains solid, with a bank debt-to-equity ratio of 8.3% and manageable debt maturities over the next several years. The reduction of its credit facility capacity from $90 million to $60 million reflects confidence in liquidity and ongoing cash generation.

Overall, Preformed Line Products’ third-quarter 2025 results highlight a company navigating near-term cost challenges while continuing to deliver strong underlying growth across geographies. With a strengthened balance sheet, rising adjusted profitability and ongoing investment in manufacturing capacity, PLPC remains positioned for long-term expansion despite tariff pressures and macroeconomic uncertainties.

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