Atkore Inc. (ATKR) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents mixed signals: strong Q1 results with a 2% organic volume increase and improved steel conduit pricing, but declining EPS and EBITDA due to higher material costs. Management's reluctance to raise guidance despite a strong start and the impact of aluminum tariffs are concerning. However, positive market trends in data centers and construction, along with productivity savings, provide balance. With a market cap of $4.8 billion, the stock is likely to experience a neutral reaction, staying within a -2% to 2% range over the next two weeks.
Key Financial Performance
Net Sales $656 million in the first quarter, a year-over-year increase driven by higher volume growth in the Electrical segment, offset by lower selling prices.
Adjusted EBITDA $69 million in the first quarter, a year-over-year decrease due to higher material costs and lower average selling prices in the Electrical segment.
Adjusted EPS $0.83 per share in the first quarter, compared to $1.63 in the prior year, reflecting a decrease due to lower selling prices and higher material costs.
Tax Rate 3% in the first quarter, a decrease from 21% in the prior year, due to a one-time discrete benefit associated with tax planning related to a foreign operation.
Organic Volume Increased 2% year-over-year in the first quarter, driven by strong performance in the Electrical segment and healthy nonresidential end market demand.
Average Selling Prices Declined 3% year-over-year in the first quarter, primarily due to lower prices for PVC conduit products, partially offset by increased prices for steel conduit products.
Productivity Savings Over $30 million year-over-year, primarily generated from the S&I segment, due to improved manufacturing efficiency and cost control.
Operating Cash Flow Declined year-over-year in the first quarter, attributed to timing differences in accounts receivable collections, which shifted to the second fiscal quarter.
Cash Proceeds from Tectron Tube Divestiture Approximately $18 million recognized in the first quarter, with an additional $7 million expected in the second quarter.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
PVC junction boxes, 20-foot conduit, and patented MC Glide armored cable: Atkore has developed these products to enhance construction installation efficiency, addressing labor-saving opportunities for installers.
Data center market growth: Moody's analysis suggests $3 trillion investment in the data center market over the next 5 years, benefiting Atkore's portfolio of metal framing, cable management, and conduit products.
Productivity savings: Achieved over $30 million in productivity savings year-over-year through improved manufacturing efficiency and cost control.
Facility consolidation: On track to exit three manufacturing facilities in Q2 FY26 as part of the 80/20 initiative to streamline operations and focus on electrical infrastructure products.
Divestiture of Tectron Mechanical Tube product line: Completed the sale to focus on electrical infrastructure portfolio, aligning with the 80/20 initiative.
Strategic alternative process: Continuing to evaluate opportunities to strengthen the business and maximize shareholder value.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Divestiture of Tectron Mechanical Tube product line: The sale of this product line and manufacturing facility may lead to reduced revenue streams, as it adjusts for approximately $40 million of annual sales.
Exit of three manufacturing facilities: The planned exit of these facilities could disrupt operations and lead to potential inefficiencies or delays in meeting customer demand during the transition.
Decline in average selling prices: Lower average selling prices, particularly in PVC conduit products, could negatively impact revenue and profit margins.
Higher material costs: Increased material costs are compressing adjusted EBITDA margins, particularly in the Electrical segment.
Timing of project-based work: Lower volume in metal framing, cable management, and construction service businesses due to timing issues could impact revenue growth.
Shifting capacity to electrical conduit products: Reallocating capacity from nonsolar mechanical products to electrical conduit products may strain resources and affect the production of other product lines.
Labor shortages in the construction industry: The need for an additional 350,000 workers in 2026 and 450,000 in 2027 could pose challenges in meeting market demand and maintaining operational efficiency.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Net Sales Outlook: Net sales for FY 2026 are expected to be in the range of $2.95 billion to $3.05 billion, adjusted for approximately $40 million of annual sales related to the divestiture of the Tectron mechanical tube product line.
Adjusted EBITDA: Adjusted EBITDA for FY 2026 is projected to be between $340 million and $360 million.
Adjusted EPS: Adjusted EPS is expected to range from $5.05 to $5.55 for FY 2026.
Volume Growth: Mid-single-digit volume growth is anticipated for the full year, driven by core construction growth and contributions from growth initiatives such as solar and global construction services.
Second Quarter Expectations: The second quarter is expected to be similar to but slightly better than the first quarter results from an adjusted EBITDA perspective.
Market Trends: The Dodge Momentum Index and Moody's analysis suggest favorable growth in nonresidential end markets and data center investments, with $3 trillion expected to flow into the data center market over the next 5 years.
Labor Market Challenges: Approximately 350,000 additional workers are needed to meet construction demand in 2026, growing to 450,000 in 2027. Atkore is addressing this through labor-saving product innovations.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you give us more color on the core markets, particularly PVC and metal conduit markets, and the timing for construction services ramp-up?
A:PVC and steel conduit markets are seeing good growth with strong backlogs and commitments for orders. Construction services, particularly in data centers, are expected to ramp up more significantly in fiscal year '27.
Q:Why didn't you raise your EBITDA and EPS guidance despite a strong Q1?
A:Management is pleased with Q1 results but prefers to wait for another quarter before revising guidance, citing the need to see how Q3 and Q4 perform.
Q:What are you seeing in the competitive environment, particularly in PVC and steel conduit markets?
A:PVC imports remain steady, accounting for less than 10% of the market, while steel conduit imports have decreased slightly. Steel conduit prices and margins are improving.
Q:Can you provide an update on the cost-saving efforts and productivity contributions, especially regarding the closure of three facilities?
A:The closures are on schedule, with expected savings of $10-12 million or more. Productivity is expected to be strong this year, though not at the $30 million level seen in Q1.
Q:What is the outlook for price-cost dynamics and the $50 million headwind previously expected?
A:The price-cost headwind is largely concentrated in the first half of the year. The back half is expected to be slightly price-cost positive.
Q:Are the strong margins in the S&I segment sustainable?
A:Margins are expected to regress to the 12-14% range due to mix dynamics and discrete benefits in Q1.
Q:What is the cash flow outlook for fiscal '26?
A:Cash flow is expected to improve throughout the year, with modestly positive cash from operations in Q2 and stronger performance in Q3 and Q4.
Q:Is backlog becoming more important, particularly for data centers?
A:Backlogs are growing for data center projects, but management is not yet ready to publicly dimensionalize this metric.
Q:What are the competitive dynamics affecting steel and PVC pricing?
A:Steel conduit demand is strong, with imports decreasing. PVC pricing faces pressure from imports and new capacity, with spread compression expected to continue.
Q:What is the expected capacity increase from shifting manufacturing resources to core electrical products?
A:The shift is primarily benefiting conduit production, particularly metal conduit, to meet long-term growth in markets like data centers.
Q:What is the outlook for steel conduit pricing and margins?
A:Steel conduit pricing has improved for four consecutive quarters, with spreads at their best levels in a long time. No significant further spread increases are baked into the guidance.
Q:What is the impact of aluminum tariffs on costs and margins?
A:The 50% aluminum tariffs have impacted costs, and management is exploring domestic supply options, though these may not fully offset the tariffs.
Q:What is the status of solar activity and the Hobart facility?
A:Solar activity was down year-over-year in Q1 due to project timing but is expected to improve in the second half. The Hobart facility is performing well, contributing to productivity gains.
Q:Review of Unclear Management Responses
A:Management avoided providing specific timelines or quantitative details for the strategic review process, backlog metrics for data centers, and the exact impact of aluminum tariffs on costs and margins.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Atkore productivity
FY cash
FY collection
FY outlook
Index end
Mechanical Tube
Slide cash
Slide volume
Tectron Mechanical
Tectron tube
Tube product
ability sale
accomplishment goal
account receivables
benefit tax
business duration
business volume
capacity product
cash collection
cash flow
cash position
cash proceeds
category end
category product
collection account
collection result
combination core
digit volume
divestiture proceeds
focus
infrastructure portfolio
initiative
manufacturing facility
market demand
outlook sale
sale outlook
tax rate
timing
tube product
ATKR Transcript
Atkore Inc. (ATKR) Q1 2026 Earnings Call Transcript
Unknown2-3
The earnings call presents mixed signals: strong Q1 results with a 2% organic volume increase and improved steel conduit pricing, but declining EPS and EBITDA due to higher material costs. Management's reluctance to raise guidance despite a strong start and the impact of aluminum tariffs are concerning. However, positive market trends in data centers and construction, along with productivity savings, provide balance. With a market cap of $4.8 billion, the stock is likely to experience a neutral reaction, staying within a -2% to 2% range over the next two weeks.
Atkore Inc. (ATKR) Q4 2025 Earnings Call Transcript
Positive11-20
The earnings call summary and Q&A reveal a positive outlook, with strong financial metrics, optimistic guidance, and strategic growth initiatives. Despite some headwinds, the company is confident in its market position and cost-saving measures. The announcement of plant closures and productivity improvements, along with potential divestments, supports a positive sentiment. The market cap of $4.8 billion suggests a moderate reaction, leading to a prediction of a positive stock price movement in the range of 2% to 8% over the next two weeks.
Atkore Inc. (ATKR) Q3 2025 Earnings Call Transcript
Positive8-6
The company's earnings call summary and Q&A session reveal a positive sentiment. The company is optimistic about demand in key markets like data centers and solar, and expects reasonable growth despite some international volatility. They plan significant share buybacks and dividend increases, enhancing shareholder returns. The company is confident in steel conduit pricing trends, with improving margins, and sees potential market share gains. However, some uncertainties exist, such as declining PVC prices and vague management responses. Overall, these factors suggest a stock price increase of 2% to 8% over the next two weeks.
Atkore Inc. (NYSE:ATKR) Q2 2025 Earnings Call Transcript
Unknown5-7
The earnings call shows mixed results: strong net sales growth and dividend increase are positives, but the slight EPS miss, pricing declines, and impairment charge are negatives. The Q&A reveals management's uncertainty around tariffs and pricing, adding to investor concerns. The market cap indicates a potential for moderate movement, but not drastic. Overall, the sentiment is balanced between positive shareholder returns and financial performance concerns, leading to a neutral stock price prediction.
ATKR Slides
ATKR Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
