Insteel Industries (NYSE:IIIN) delivered fiscal third-quarter results ahead of Wall Street expectations, with stronger selling prices helping the steel wire reinforcement manufacturer surpass analyst forecasts for both earnings and revenue.
The company reported adjusted earnings of $0.46 per share, slightly above the consensus estimate of $0.45, while revenue reached $197.7 million, exceeding analyst expectations of $192.06 million.
Shares were little changed in premarket trading, slipping around 0.1% following the earnings release.
Revenue growth driven by pricing and shipments
Quarterly revenue increased 9.9% from $179.9 million in the same period last year.
The improvement reflected an 8.0% increase in average selling prices, supported by a 1.7% rise in shipment volumes during the quarter.
Despite stronger sales, net earnings declined to $9.0 million from $15.2 million a year earlier as rising operating costs weighed on profitability.
Higher input costs pressure margins
Gross profit fell to $20.1 million from $30.8 million in the prior-year period, while gross margin narrowed to 10.2% from 17.1%.
Management attributed the decline primarily to higher wire rod costs, increased freight expenses and broader inflationary pressures across the business.
“Profitability during the quarter was impacted by higher costs, as increases in wire rod prices, freight expense, and practically all other operating costs outpaced changes in selling prices,” said H.O. Woltz III, Insteel’s President and CEO.
“We believe these headwinds are temporary and expect to recover these higher costs through our pricing over time.”
Nine-month revenue continues to grow
For the first nine months of fiscal 2026, Insteel generated net earnings of $21.8 million, or $1.12 per share, compared with $26.5 million, or $1.35 per share, in the corresponding period last year.
Revenue for the nine-month period climbed to $530.2 million from $470.3 million, largely reflecting a 13.1% increase in average selling prices.
While inflationary cost pressures continued to weigh on margins during the quarter, stronger pricing and improving shipment volumes helped Insteel deliver results ahead of market expectations.
