ESE

ESCO’s second quarter results were met with a negative market reaction, as the company’s revenue fell slightly short of Wall Street expectations despite solid year-over-year growth. Management cited strong order activity across aerospace, utility, and test segments as key drivers of performance, with CEO Bryan Sayler highlighting “continued order strength” and a record backlog. Notably, the Utility Solutions group, led by Doble, delivered double-digit growth supported by rising demand for grid modernization and electrification, while the Test business saw robust industrial shielding and data center orders. The quarter also reflected the early benefits of ESCO’s enterprise-wide continuous improvement initiative. Is now the time to buy ESE? Find out in our full research report (it’s free). Revenue: $339 million vs analyst estimates of $341.4 million (14.4% year-on-year growth, 0.7% miss) Adjusted EPS: $2.20 vs analyst estimates of $2.12 (3.9% beat) Adjusted EBITDA: $83.76 million vs analyst estimates of $84.55 million (24.7% margin, 0.9% miss) The company slightly lifted its revenue guidance for the full year to $1.32 billion at the midpoint from $1.31 billion Management raised its full-year Adjusted EPS guidance to $8.35 at the midpoint, a 2.8% increase Operating Margin: 14.8%, in line with the same quarter last year Backlog: $1.54 billion at quarter end, up 31.7% year on year Market Capitalization: $7.78 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Thomas Moll (Stephens): asked about the composition of new data center customers in the Test business. CEO Bryan Sayler clarified that growth is concentrated in commercial data centers with government and critical utility data, and noted expanding adoption, but did not disclose specific customer names. Scott Deuschle (Deutsche Bank): questioned sequential margin declines in the Utility Solutions group despite rising sales. CFO Chris Tucker cited unfavorable product mix and timing of expenses, along with ongoing weakness in the renewables (NRG) segment. Will (CJS Securities): inquired about defense business growth drivers and the mix of programs versus aftermarket. Sayler said the “core business in submarine programs” is the main accelerator, with aftermarket growth steady but not the primary contributor. Tomohiko Sano (JPMorgan): pressed for detail on NRG’s return to growth and headwinds. Sayler replied recovery is unlikely until next year, driven by tax credit expirations and market normalization, with a faster rebound expected for solar than wind. Thomas Moll (Stephens): followed up on Megger integration timeline and impact on guidance. Tucker stated that, if closed as planned, Megger would be included in the company’s next annual guide and that financing terms are already secured. In the coming quarters, the StockStory team will closely monitor (1) the pace and success of the Megger integration and realization of projected synergies, (2) ongoing order trends and backlog conversion in aerospace and defense, and (3) the trajectory of Doble’s utility segment, particularly in condition monitoring and grid modernization. The recovery pace in renewables and developments in operating system implementation will also be critical signposts. ESCO currently trades at $300.57, down from $328.03 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Cerebras Systems CBRS reported a second-quarter 2026 loss of 4 cents per share, narrower than the Zacks Consensus Estimate, delivering an 80.95% earnings surprise. Core revenues of $209.87 million rose 103% year over year and topped the consensus estimate by 8.09%. The upside was led by rapid adoption of fast inference services. Core cloud and other services revenues surged 287% year over year to $127.7 million, while remaining performance obligations reached $25.4 billion. Core cloud and other services revenues nearly quadrupled from $33 million a year earlier, reflecting the ramp-up of the OpenAI deployment and higher usage from other cloud customers. Core hardware revenues rose 17% year over year to $82.1 million.Management said the revenue mix can vary significantly from quarter to quarter depending on the timing of large cloud-capacity additions and hardware shipments. Demand remained strong, with several late-stage hardware opportunities representing hundreds of millions of dollars and additional cloud deals targeted for 2027. Cerebras Systems Inc. price-consensus-eps-surprise-chart | Cerebras Systems Inc. Quote Cerebras signed new cloud-capacity agreements with AI coding companies Cognition and Lovable. It cited Block, Figma, AlphaSense and GSK among customers using fast inference for agentic workflows.The company highlighted CrowdStrike as an example of a new security use case, where low-latency large language model inference can inspect enterprise traffic inline. Management also said six deals worth more than $30 million each were signed during the quarter. The company enabled support for OpenAI's GPT-5.6 Sol at 750 tokens per second. Cerebras also expanded its disaggregated inference strategy with AMD, pairing GPU-based prefill processing with Cerebras systems for decoding.Management said the AMD configuration can maintain Cerebras' speed while increasing throughput by up to fivefold and is expected to enter production in the fourth quarter of 2026. A similar disaggregated inference offering with AWS is expected to become generally available through Amazon Bedrock in the first quarter of 2027. In the second quarter of 2026, core gross margin was 40.6%, up about 940 basis points year over year. Core cloud and other services gross margin was 41.8%, while core hardware gross margin came in at 38.8%. Sequential margin pressure reflected the temporary use of higher-cost systems rented back from cloud customers.Operating expenses totaled $502.8 million. Research and development expenses were $320.2 million, sales and marketing expenses were $87 million, and general and administrative expenses were $95.7 million. The sharp increase in reported expenses included substantial stock-based compensation costs.Core operating loss was $33.6 million compared with $43.9 million a year earlier and core operating margin improved to negative 16% from negative 42%.Adjusted EBITDA was a loss of $53.1 million compared with a loss of $38.3 million in the prior-year quarter. The balance sheet strengthened meaningfully. As of June 30, 2026, cash, cash equivalents, restricted cash and short-term investments totaled $8.6 billion. The company has access to an $850 million revolving credit facility, which remained unused at quarter-end.For the first six months of 2026, net cash used in operating activities was $47.5 million. Purchases of property and equipment totaled $548.9 million as the company continued investing in the data center and infrastructure capacity needed to support future growth. For the third quarter of 2026, Cerebras expects core revenues to be in the range of  $214-$216 million. Core gross margin is projected between 38% and 40%, while core operating margin is expected between negative 25% and negative 23%.For full-year 2026, management raised core revenue guidance to $880-$890 million. Core gross margin is expected to be 41%-43%, while core operating margin is projected between negative 19% and negative 17%. Management expects core revenues to more than triple in 2027. Cerebras has secured more than 600 megawatts of data center capacity that is either live or under contract for delivery by the end of 2027. Its pipeline of additional data center opportunities is measured in gigawatts, as available capacity remains a key constraint on revenue growth.Manufacturing capacity is expected to increase more than tenfold in 2026, supported by new factory lines at Flex, Sanmina and Rocket EMS. The company secured TSMC wafer supply and highlighted that its architecture does not require High Bandwidth Memory (HBM), CoWoS packaging or 3-nanometer fabrication technology. Currently, Cerebras Systems carries a Zacks Rank #2 (Buy). A few stocks worth considering in the broader Zacks Business Services sector are Coursera COUR, Gartner IT, and ESCO Technologies ESE. Coursera and Gartner currently sport a Zacks Rank #1 (Strong Buy) each, while ESCO Technologies carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The long-term earnings growth rates for Coursera, Gartner and ESCO Technologies are pegged at 49.63%, 20.97% and 20.89%, respectively. Shares of COUR and IT declined 24.1% and 28.9%, respectively, while ESE shares appreciated 53.7%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cerebras Systems Inc. (CBRS) : Free Stock Analysis Report ESCO Technologies Inc. (ESE) : Free Stock Analysis Report Gartner, Inc. (IT) : Free Stock Analysis Report Coursera, Inc. (COUR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5 p.m. ET President and Chief Executive Officer - Bryan Sayler Senior Vice President and Chief Financial Officer - Christopher Tucker Vice President of Investor Relations - Kate Lowrey Operator: Good day, and thank you for standing by. Welcome to the Third Quarter 2026 ESCO Technologies Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. On the call today, we have Bryan Sayler, President and CEO; Chris Tucker, Senior Vice President and CFO. And now I'd like to turn the conference over to our first speaker today, Kate Lowrey, Vice President of Investor Relations. Kate, you now have the floor. Kate Lowrey: Thank you. Statements made during this call, which are not strictly historical are forward-looking statements within the meaning of the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and actual results may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the company's operations and business environment, including, but not limited to, the risk factors referenced in the company's press release issued today, which will be included as an exhibit to the company's Form 8-K to be filed. We undertake no duty to update or revise any forward-looking statements, except as may be required by applicable laws or regulations. In addition, during the call, the company may discuss non-GAAP financial measures in describing the company's operating results. Reconciliation of these measures to the most comparable GAAP measures can be found in the press release issued today and found on the company's website at www.escotechnologies.com under the link, Investor Relations. Now I'll turn the call over to Bryan. Bryan Sayler: Thanks, Kate, and thanks, everyone, for joining today's call. We're pleased to meet with you this afternoon to discuss ESCO's third quarter results. In Q3, we continue to see positive momentum in each of our business segments as demand across our served end markets continues to build. Aerospace, utility and test orders were all strong, driving a consolidated book-to-bill of 1.21. This continuing strength lifted backlog to record levels across A&D, Test, Doble and at the consolidated level. This is all clear evidence of growing end market demand and the strength of our competitive position. Operationally, Q3 was another strong quarter of revenue and earnings performance, continued order strength is flowing through to drive high single-digit organic revenue growth and operating leverage. Over the past year or so, we have been working on development and implementation of an enterprise-wide continuous improvement process, which we will call the ESCO operating system. Although we are still in the early stages of the operating system implementation, we are already beginning to see impacts across our businesses through greater consistency and execution and are building a stronger foundation for sustainable value creation over time. Chris will run you through all of the financial details for the third quarter. But before that, I wanted to give you a few comments on each segment. Starting with aerospace and defense. I recently had the opportunity to attend the Farnborough Airshow. It was really a great event, and it made clear that investments will continue to be made by our customers to support and continue robust demand outlook. On the commercial side, the industry continues to be supported by a global aircraft backlog of approximately 18,000 aircraft with an estimated unmet demand of an additional 5,000 aircraft. This demand backdrop underpins a long-duration production ramp and creates a compelling growth runway for OEMs, suppliers and subcontractors across the aerospace value chain. At the same time, the show made clear that defense, security and strategic resilience are becoming increasingly central to the industry narrative. Defense companies represented roughly half of the record exhibitor base at Farnborough, reflecting elevated military spending and a more complex geopolitical backdrop. Taken together, Farnborough reinforced the aerospace growth trajectory supporting a durable, multiyear production cycle. Strong commercial OEM and services outlook remain intact, while defense demand appears positioned to accelerate as governments prioritize readiness, modernization and resilient supply chains. On the Navy side, we continue to see evidence of a strong commitment to submarine programs. Last week, the Navy awarded the largest shipbuilding contracted history to the prime contractors for the remaining 9 Block VI Virginia class and the next 5 Columbia class submarines. ESCO is already under contract with the primes for this content and the Navy's actions last week increased our confidence in the long-term outlook for submarine programs. Turning to the Utility Solutions group. Doble's continued order strength has translated into double-digit revenue growth year-to-date as rising power demand, electrification and grid modernization are all increasing the need for reliable, well-maintained electrical infrastructure. As utilities expand their generation, transmission and distribution capacity to support data centers, EVs industrial electrification, heat pumps and other sources of load growth, they must invest in tools that help maintain aging assets, diagnose and prevent failures, reduced downtime and ensure grid reliability, safety and compliance. In addition, as they progress on the longer-term infrastructure build-out, they need support in commissioning new assets and maintaining a larger, more complex grid. These are durable demand drivers for utility test instrumentation providers like Doble and Megger. Related to the Megger acquisition, we continue to work through the regulatory filing process in the required countries. This is all going smoothly, and the timing is tracking to our expectations. We continue to believe that this process should be completed in a time frame that results in closing the deal in the first quarter of our fiscal 2027. Teams from both ESCO and Megger, are actively collaborating on important integration planning activities. We believe this advanced work will help establish a clear path for efficient, well-coordinated integration of Doble and Megger while keeping us focused on achieving the anticipated synergies. Bringing Megger into the ESCO portfolio will build greater scale in utility solutions and reinforce our role as a trusted partner to utility customers around the world. The acquisition is an important milestone in the continued advancement of our portfolio, and we remain optimistic about the long-term prospects for the utility markets that we serve. Finally, I'll touch on the Test business. which had another strong orders quarter with 42% growth over the prior year. Test order strength in Q3 was driven by industrial shielding projects and electromagnetic interference filters. On Industrial shielding, those orders primarily related to secure shielded rooms in both the U.S. and Europe. The EMI filters are for use in commercial and government data centers. The continued demand strength at Test is encouraging, and the team there is doing a really nice job of improving execution and expanding margins as their end market momentum continues. With that, I'll turn it over to Chris to run you through the financial details of the quarter. Christopher Tucker: Thanks, Bryan. Everyone can follow along on the chart presentation. We will start on Page 3 which shows the financial highlights for the third quarter. ESCO had another strong quarter of top line growth, translating to even better growth in adjusted earnings and operating cash flow. Getting to the numbers, we start with orders where the book-to-bill ratio in the quarter was 121%. All 3 segments delivered book-to-bill ratios over 100%, leading to a record backlog of $1.54 billion. Order growth in the quarter was negative, but that resulted mostly from the $364 million of acquired backlog from the Maritime acquisition that took place in last year's third quarter. Turning to sales. Reported growth was 14%, which was comprised of 8% organic growth and $23 million of incremental sales from Maritime. Just to remind everyone, we had a 2-month impact from Maritime in last year's third quarter, while this year was a full 3-month impact. On the profitability side, we saw adjusted EBIT margins improved by 90 basis points to 22% and adjusted earnings per share increased by 37.5% to $2.20 per share. Next, we will go through segment highlights, starting with Aerospace and Defense on Page 4. Another great quarter here as the A&D business continues to deliver for ESCO. Starting with orders, A&D had a book-to-bill ratio of 116% with particular strength from our aircraft components business. You can see from the bar chart on the left, we showed a large percentage decline in orders compared to last year. There are 2 main factors driving the percentage drop. First, and as mentioned previously, there was $364 million of acquired backlog from Maritime last year. Second, the Navy business at Globe received $82 million of Virginia and Columbia class orders in the last -- in last year's third quarter, which did not fully repeat this year. With backlog of $1.1 billion, the business continues to be situated well for future growth. Sales in the quarter were $168 million, which represents an increase of 23%. Organic growth was 9%. The organic growth was driven by 10% increases from commercial and defense aerospace as well as 10% from the Navy business. So a really nice performance from all parts of the core aerospace and defense platform. On the profitability side, we had good improvement to 30% adjusted EBIT margins, an increase of 120 basis points. Margin increases were due to positive impacts from leveraging sales growth and increased prices. Next, we'll go to Chart 5 and the Utility Solutions group. Orders here were up 20% in the third quarter, and that was driven by exceptional performance at Doble, where orders grew by 30%. We did see weak orders performance at NRG, where the renewables markets continue to be very soft. Sales in the quarter were up 8%. Again, the growth was driven by Doble, where sales increased by 17%. Doble continues to see strong end market activity across a number of product lines serving their regulated utility customer base. Adjusted EBIT margins in the quarter declined by 130 basis points. Doble margins increased modestly but were more than offset by margin declines at NRG. Next, we have the Test business on Page 6. This business had another good quarter, starting with orders, which increased by 42%. The order growth was driven by industrial shielding products, projects and EMI filters in the U.S. This business is seeing robust market activity centered around U.S. and European EMC test and measurement as well as power filter demand in the U.S. Sales in the quarter increased by 5% and adjusted EBIT margins increased 50 basis points to 16.4%. The margin improvement was driven by volume leverage is somewhat offset by inflationary pressures. Next to Chart 7, where we have year-to-date highlights. The first 9 months saw ESCO deliver great results as we work towards another record year. Order strength has been significant, with 19% organic growth year-to-date. All 3 businesses have delivered double-digit organic growth with aerospace and defense and test at 20% and 26%, respectively. Sales have also been strong with 11% year-to-date organic growth, led by test at 18% and aerospace and defense at 12%. Adjusted EBIT margins are up 250 basis points year-to-date and adjusted earnings per share have increased by 55%. Going to Chart 8, we have cash flow highlights for the first 9 months. Operating cash flow is up significantly at over $193 million compared to $88 million in the prior year. The key driver for the increase has been increased advanced payments on large Navy contracts. Capital spending is up slightly compared to last year and acquisition spending is down significantly this year, given the large Maritime deal in April of 2025. The EBITDA leverage is low at 0.2x, and we continue to be positioned well for the debt requirements that will come with the Megger deal, which is expected to close in the first quarter of fiscal 2027. Our last chart is #9, where we have updated 2026 guidance. With another strong quarter, we are increasing the full year '26 guidance. We now expect full year adjusted earnings per share of $8.30 to $8.40 per share. This represents an increase of 38% to 39% compared to fiscal 2025. This is a substantial increase from our original November guide, and you can see from the bar graphs at the bottom of the page, we expect 2026 to be another record year and a nice continuation of the growth trend ESCO has delivered since fiscal 2021. That completes the financial summary, and now I'll turn it back over to Bryan. Bryan Sayler: Thanks, Chris. As you've heard from our commentary, Q3 was another solid quarter, and we're looking at another year of strong revenue and earnings growth. And with record backlog, we continue to feel great about the long-term prospects for ESCO. That concludes our opening remarks, and we'll now turn it over to Q&A. Operator: [Operator Instructions]. Our first question comes from the line of Tommy Moll from Stephens. Thomas Moll: Bryan, it wasn't the first time that you mentioned data center orders for the Test business, but you did give us a little more detail this time. So I'm curious to ask what more can you tell us about the complexion of that customer base? And is this one that has broadened over the last couple of quarters for you where you've had success with new and additional customers? Bryan Sayler: Yes. I would say that we are -- we have seen a little bit of improvement in the outlook there. We have a couple of good customers there. I don't want to get into the details of who they are, but they're in that, broadly speaking, data center space. It's important to remember that not every data center has a requirement for this kind of EMP protection. But any commercial data center that's going to house government data, utility systems, that sort of thing, those critical infrastructure, they tend to have this requirement. And we see it being embraced increasingly, and I think we're doing pretty well in terms of our market attainment. Thomas Moll: And then shifting gears to Doble, Bryan, very strong acceleration there, both in terms of sales and orders. Particularly on the order side, what can you -- what additional detail can you give us there? And relatedly, have you been able to discern how Megger's book has shaped up since you announced the deal? I mean this is a big move higher for your order book. I'd be curious if they've seen the same thing. Bryan Sayler: Yes. I would say that the 30% year-over-year increase in orders was very broad-based. We had -- I mean, honestly, we had a 67% increase in our condition monitoring business that was led largely by some pretty good-sized large, high-voltage cable monitoring orders. We had a 13% increase in our services business. We had a 23% increase in our protection business, 13% in off-line testing. And we had a large renewal of one of our cybersecurity clients. So really broad-based across the board improvements there. The one laggard in our utility business continues to be the renewables business. And on a year-over-year basis, that was down considerably, but we are seeing some sequential growth that is encouraging. You asked about Megger. So we have reason to believe that they are seeing something similar. I don't have as much detail on their numbers, but they're up nicely over the prior year. And that's an indication that the market itself broadly is improving and continues. I think we've been talking about this buildup in their spending for some time. And I'd say it certainly looks real, and we have POs to prove it. Operator: Our next question comes from Scott Deuschle from Deutsche Bank. Scott Deuschle: Chris, can you share the updated segment revenue guidance? Christopher Tucker: Yes. I mean, what I would say is we don't typically give a guide every quarter on that. I mean what I would tell you is for A&D on an underlying basis, excluding Maritime, we're looking at 8% to 10% for the year. For test, we would be more like 10% to 12% now. And then for utility overall, more like 4% to 6%, something like that. Scott Deuschle: Okay. And then how did the Doble outlook within utility change? Christopher Tucker: So we're -- we'd be like low double digit there. So if you look at kind of where they've been, we would kind of see them continue in that trend through the fourth quarter. Scott Deuschle: Okay. And then either Bryan or Chris, why did USG margins go down sequentially on sales that were up sequentially? Christopher Tucker: Yes. I would say the main thing there, if you look at the Doble margins. They were up versus last year. But given the sales growth, they weren't up a lot. We had a little bit of unfavorable mix there. Some of the high voltage lines are seeing a lot of growth there product lines. Those are a little bit unfavorable mix in the business. So that's one issue. We also had just timing on some expenses for different SG&A and cost of sales items. So that was kind of one of the factors in there as well. And then I would point to NRG. The NRG margins, we are kind of scuffling along the bottom here. And again, Scott, I'm kind of talking a little bit to prior year comps. But last year, they had very nice margins in the third quarter at NRG, kind of in line with the overall segment. And they're operating quite a bit below that right now, more like low double-digit type margins there. So that's really a big hit year-to-year and kind of a key driver in the overall kind of margins. I would say if you look at year-to-date at Doble, right kind of right in line with where we thought they'd be year-to-date. They're really strong in the second quarter, not quite as strong here in the third. Scott Deuschle: Okay. Have there been any like discrete inflationary pressures and cost of goods sold that have impacted USG, things like DRAM costs or electronics like that? Bryan Sayler: We haven't seen any that are really material at this point. I mean, we're anticipating that, and we're trying to get ahead of it, but we haven't seen anything that would be reflected in the third quarter numbers. Scott Deuschle: Okay. And then last question, Chris, is a 30% incremental EBIT margin for A&D still the correct go-forward rate given that you printed a 30% margin this quarter? Christopher Tucker: Yes. Listen, I think, as Bryan mentioned, we're kind of trying to roll out this kind of operating system. I think that -- we continue to expect to take the margins up there. I'll say it that way. I think the 30% could maybe be a little bit lower there. But when we put that 30% target out, we're kind of talking about the company in total. So I think for A&D, there are certainly parts of that we're going to have to do better than that to continue to drive margins up. So that's how we're looking at that right now. Operator: Our next question comes from the line of Jon Tanwanteng from CJS Securities. Unknown Analyst: This is Will on for John. Can you talk about the strength in the defense business, you're seeing more relative strength from programs of record or more from aftermarket activity and consumables? And how should we think about that over the next couple of quarters given the high usage rate? Bryan Sayler: Yes, I think it's mostly from programs of record. I mean, I think that our aftermarket business there continues to accelerate at about the same rate as the rest of the business. So we're kind of maintaining that kind of 30% pressure -- or excuse me, 30% ratio. But our core business in -- particularly in the submarine programs is what's driving the big acceleration that you're seeing. And listen, we have every reason to believe that's going to continue. Unknown Analyst: Are you seeing a light at the end of the tunnel for NRG? When do you think you might return to year-over-year growth? Bryan Sayler: Well, we got one more quarter of pretty tough comps. If you will remember that right about now a year ago is when the One Big Beautiful Bill kind of went into effect. So what you're seeing in the third quarter from 2025 versus reflected in a quarter where the renewables market was still white hot. We carried that backlog through into the fourth quarter, we had a really good fourth quarter last year. So I think you're going to see another year-over-year negative in the fourth quarter. But I'm encouraged by the fact that we're beginning to see sequential growth. And so I would continue to believe that as we move into FY '27, that's when we'll begin to see a return to growth off of a lower base. And so the business doesn't get back to where it was in FY '25, but we do begin to see something that will look like high single-digit growth from that point forward. Operator: Our next question comes from the line of Tomo Sano from JPMorgan. Tomohiko Sano: I'd like to ask you about NRG in the USG. Could you talk about beyond U.S. tax credit dynamics? What are the key bottlenecks for NRG customer and CapEx cycles, competitions, portfolio gaps and so on. And what kind of actions are you taking like to address them? Bryan Sayler: Yes, yes. So NRG, it's principally diagnostics business that's around solar and wind generation, utility scale terrestrial. So what's happened there, the dynamic is driving the unpleasantness this year. It's really around the capital spending that you're seeing from energy developers who are -- really have been focused on safe harboring the projects that they already have in process. And so they've been working on qualifying for the tax credits, which expired last week. So now what we expect to see is that they will return to a broader focus. We do think long term that there's a place at the table for renewables because they are affordable relative to other forms of generation. They are available. We would expect to see a faster return to growth on the solar side compared to the wind side due to some of the animosity that the current administration has towards wind. So there have been some permitting issues there. From a structural perspective, there have been some cost incurred on the wind side from tariffs and things like that. But otherwise, we remain -- our belief continues to be that on a levelized cost of energy basis the wind and solar continue to be attractive and affordable. And then over time, that we're going to see a return to growth in those markets. Tomohiko Sano: And if you could talk about in the first 100 days post the close of Megger, what are the top priorities ahead? Bryan Sayler: Sure, sure. Well, so the good news is we've got a team that's kind of putting that plan together. What we would expect to do is shortly after closing, we're going to be able to communicate those plans across the business. We haven't -- we have not finished them. But that will require us to take a hard look at our footprint, our manufacturing sites, harmonizing our product lines, putting together our go-to-market strategy, those are all the big things that you should see rolled out in that first, along with a new combined identity of the combined enterprise. I think the other thing that I might want to mention, I maybe didn't answer the question on other things we've done at NRG. We have taken some costs out of the business at NRG and we will be rolling that into the larger Doble Megger platform as a business unit rather than as a stand-alone enterprise. Tomohiko Sano: That's helpful. And if I may squeeze a last one. Regarding improved operating cash flow, how much of the working capital benefit is structural versus timing related? Christopher Tucker: Listen, I would say that we -- over time, we kind of target free cash flow conversion to adjusted net earnings of around 100%, we're going to be above that a little bit this year because of the timing of some of these big contract payments. So I think, structurally, we feel really good about driving that 100%. But you'll see periods like now where we're above it, and you might see periods where we're more like 90%, 95%. But net-net, we're still going to have high-quality conversion in that 100% range. Operator: Our next question comes from Scott Deuschle from Deutsche Bank. Scott Deuschle: Bryan, can you say what the lead times are for the condition monitoring orders that you secured in the quarter? Bryan Sayler: Yes. So the cable monitoring orders are the longest lead time. We kind of have to go at the rate that the cables themselves are built. And so that requires some field construction and that sort of thing. So they can be as long as a year. Scott Deuschle: Okay. And what percentage of the business is that? Bryan Sayler: I think it's -- I don't know the answer. Well, that's overall -- overall condition monitor is about 20% of the business, yes. Scott Deuschle: Okay. And just to be clear, you said condition monitoring orders were up 67%? Bryan Sayler: Yes, they were up big time this quarter on a year-over-year basis, yes. Scott Deuschle: Okay. I mean if 20% of the business grows 50%, you grow double digits next year, just off of that piece, like I guess, how much can I extrapolate off of this quarter? Or is it just lumpiness you'd say? Bryan Sayler: So we're going to stick with our very, very, very high single digits. Scott Deuschle: Okay. All right. And then, Chris, I think last quarter, there had been some pushout in surface ship revenue due to challenges the yards have faced and ramping up output. Has that gotten any better and normalized at this point? Or have you seen any additional push out? Christopher Tucker: I would say no more pushouts. I would say kind of the recovery plan that we put in place after some of those pushouts last quarter has kind of unfolded as expected. But we continue to kind of watch those programs pretty closely. Operator: Our next question comes from Tommy Moll from Stephens. Thomas Moll: Just to close with a couple of Megger if we could. Chris, I think when you announced the deal, you told us where you were dialing in the cost of debt there. But I just wanted to see if you could give us any updated view. And then if this deal closes, on your anticipated time line, when you report Q4, will you be able to then give us the NTM guide for fiscal '27 inclusive of Megger at that time? Christopher Tucker: Yes, Tommy, we would anticipate if the schedule tracks the way we're hoping it does that our November announcement would include Megger in the guide. So that's our anticipation. We can give you our best look at the interest cost as part of that guidance. I would tell you right now, we do expect the cost of debt to be around 6%. We've got kind of our Term Loan A, Term Loan B terms locked in. Those are SOFR instruments. We've actually executed a deal contingent hedge as well to kind of lock in a portion of that for next year. That's slightly below 6%. But I think right now, where we are, 6% is the right way for you to plan it. Thomas Moll: Got it. That's all for today. Thanks again. Operator: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Bryan Sayler for closing remarks. Bryan Sayler: Well, listen, thanks, everyone, for taking some time to learn a little bit more about ESCO today. We continue to believe that our outlook is very bright, and we're working hard to make it come true. Talk to you next quarter. Operator: Thank you for participating in today's conference. This does conclude the program. You may now disconnect. Thank you. Before you buy stock in ESCO Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ESCO Technologies wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. ESCO (ESE) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in ESCO Technologies Inc.? Here are five stocks we like better. Strong third-quarter performance: Sales rose 14% year over year, adjusted EPS increased 37.5% to $2.20, and adjusted EBIT margin expanded to 22%. Record backlog reached $1.54 billion, supported by a 1.21 book-to-bill ratio. Aerospace, defense and test demand remained robust: Aerospace & Defense sales grew 23%, while test orders surged 42% on industrial shielding and EMI-filter demand. Utility Solutions orders also rose 20%, led by a 30% increase at Doble, though weaker renewable markets pressured NRG. Outlook improved: ESCO raised fiscal 2026 adjusted EPS guidance to $8.30–$8.40, representing 38%–39% growth. The company still expects to close its Megger acquisition in the first quarter of fiscal 2027, pending regulatory approvals. ESCO Technologies (NYSE:ESE) reported third-quarter fiscal 2026 results marked by organic sales growth, higher profitability and record backlog, as demand remained strong across its aerospace and defense, utility solutions and test businesses. The company posted a consolidated book-to-bill ratio of 1.21 during the quarter, with each operating segment exceeding 1.0. Backlog reached a record $1.54 billion, including a $1.1 billion backlog in Aerospace & Defense. Reported sales increased 14% from a year earlier, including 8% organic growth and $23 million of incremental sales from the Maritime acquisition. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Adjusted EBIT margin rose 90 basis points to 22%, while adjusted earnings per share increased 37.5% to $2.20. Operating cash flow for the first nine months of the fiscal year totaled more than $193 million, up from $88 million in the prior-year period, aided by increased advance payments on large Navy contracts. Aerospace & Defense sales rose 23% to $168 million, including 9% organic growth. Chris Tucker, ESCO’s senior vice president and CFO, said organic growth reflected 10% increases in both commercial aerospace and defense activity and the Navy business. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The segment’s adjusted EBIT margin increased 120 basis points to 30%, supported by sales leverage and pricing. Its book-to-bill ratio was 1.16, with particular strength in aircraft components. President and CEO Bryan Sayler said the commercial aerospace outlook remains supported by a global aircraft backlog of approximately 18,000 aircraft, alongside estimated unmet demand for another 5,000 aircraft. He also cited increased emphasis on defense spending, security and supply-chain resilience among aerospace customers. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High On naval markets, Sayler pointed to a recent Navy award to prime contractors for the remaining nine Block VI Virginia-class submarines and the next five Columbia-class submarines. ESCO is already under contract with prime contractors for its related content, he said, adding that the action increased management’s confidence in the long-term outlook for submarine programs. During the question-and-answer session, Sayler said defense growth was being driven principally by programs of record, particularly submarine programs. The company’s aftermarket business continues to expand at roughly the same rate as the broader business and represents about 30% of that business, he said. Utility Solutions Group orders increased 20% in the third quarter, driven by a 30% increase at Doble. Sales for the segment rose 8%, as Doble sales climbed 17% on demand across product lines serving regulated utility customers. Sayler said utilities are investing in maintenance, diagnostics, reliability and commissioning tools as power demand rises and grids expand to support data centers, electric vehicles, industrial electrification, heat pumps and other sources of load growth. Doble’s order strength was broad-based, according to Sayler. Condition-monitoring orders increased 67%, aided by large high-voltage cable-monitoring orders, while services orders rose 13%, protection orders increased 23% and offline testing orders gained 13%. The company also secured a large cybersecurity-client renewal. However, NRG, ESCO’s renewables-focused diagnostics business, continued to face weak order trends amid softer renewable-energy markets. Utility Solutions adjusted EBIT margin declined 130 basis points in the quarter. Tucker said modest margin improvement at Doble was more than offset by weaker profitability at NRG, as well as unfavorable product mix and timing of certain expenses. Sayler said NRG has taken costs out of its business and is beginning to see sequential growth, though he expects another year-over-year decline in the fiscal fourth quarter due to difficult comparisons. He said management expects the business to return to growth in fiscal 2027 from a lower base, with growth potentially reaching the high single digits, though it is not expected to return to fiscal 2025 levels immediately. ESCO’s test business recorded a 42% increase in orders, driven by industrial shielding projects and electromagnetic interference, or EMI, filters. Sales increased 5%, while adjusted EBIT margin improved 50 basis points to 16.4% as volume leverage more than offset inflationary pressures. Sayler said industrial shielding orders involved secure shielded rooms in the United States and Europe. EMI filters were ordered for commercial and government data centers. He noted that not every data center requires electromagnetic pulse protection, but facilities housing government data, utility systems or other critical infrastructure may have such requirements. The company said test-market activity remains robust in U.S. and European electromagnetic compatibility test and measurement markets, as well as in U.S. power-filter demand. ESCO continues to expect its acquisition of Megger to close in the first quarter of fiscal 2027, subject to completion of required regulatory filings in multiple countries. Sayler said the regulatory process was proceeding smoothly and according to expectations. Teams from ESCO and Megger are working on integration planning before closing. Sayler said initial priorities will include reviewing the combined footprint and manufacturing sites, harmonizing product lines, developing a go-to-market strategy and establishing a combined identity for the enterprise. The company expects the transaction to expand its scale in utility solutions and support anticipated synergies. Tucker said ESCO’s EBITDA leverage stood at 0.2 times at the end of the period, leaving the company positioned for the debt associated with the acquisition. He said ESCO currently expects the cost of debt for the transaction to be about 6% and anticipates that its November guidance update would include Megger if the transaction closes on the planned timeline. For fiscal 2026, ESCO raised its adjusted EPS guidance to a range of $8.30 to $8.40, representing growth of 38% to 39% from fiscal 2025. Tucker said the company expects underlying full-year sales growth of approximately 8% to 10% in Aerospace & Defense, 10% to 12% in test, and 4% to 6% in Utility Solutions. Doble is expected to maintain low-double-digit growth through the fiscal fourth quarter, he added. For the first nine months of fiscal 2026, ESCO reported 19% organic order growth and 11% organic sales growth. Adjusted EBIT margin increased 250 basis points year to date, while adjusted EPS rose 55%. ESCO Technologies Inc is a diversified manufacturer of engineered products and systems designed to meet customers' critical performance requirements in the test, measurement, control, and filtration of data, fluids, and gases. The company serves a wide range of end markets, including commercial aerospace, defense, industrial, medical, and communication network sectors. ESCO's solutions are tailored to environments where reliability, precision and regulatory compliance are paramount. Operating through multiple business segments, ESCO Technologies delivers test and measurement instruments such as RF and microwave components, signal distribution systems, and integrated test enclosures that support defense and aerospace programs. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ESCO Technologies Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Esco Technologies (ESE) came out with quarterly earnings of $2.2 per share, beating the Zacks Consensus Estimate of $2.12 per share. This compares to earnings of $1.6 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.77%. A quarter ago, it was expected that this maker of smart meters and filtration products would post earnings of $1.9 per share when it actually produced earnings of $1.91, delivering a surprise of +0.53%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Esco Technologies, which belongs to the Zacks Technology Services industry, posted revenues of $339.03 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.15%. This compares to year-ago revenues of $296.34 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Esco Technologies shares have added about 67.7% since the beginning of the year versus the S&P 500's gain of 12.8%. While Esco Technologies has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Esco Technologies was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.53 on $378.29 million in revenues for the coming quarter and $8.20 on $1.32 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Peraso (PRSO), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This semiconductor technology company is expected to post quarterly loss of $0.18 per share in its upcoming report, which represents a year-over-year change of +35.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Peraso's revenues are expected to be $1.25 million, down 43.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ESCO Technologies Inc. (ESE) : Free Stock Analysis Report Peraso Inc. (PRSO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: Reported sales growth of 14%, comprising 8% organic growth and $23 million of incremental sales from Maritime. Adjusted Earnings Per Share: Increased 37.5% to $2.20 per share in Q3. Adjusted EBIT Margin: Improved by 90 basis points to 22%. Orders: Consolidated book-to-bill ratio of 1.21, with all three segments above 100%. Backlog: Record backlog of $1.54 billion. Operating Cash Flow: Over $193 million for the first nine months, up from $88 million in the prior year. Aerospace & Defense Sales: $168 million, an increase of 23%, with 9% organic growth. Aerospace & Defense Adjusted EBIT Margin: Improved 120 basis points to 30%. Utility Solutions Group Sales: Up 8%, driven by Doble's 17% increase. Utility Solutions Group Adjusted EBIT Margin: Declined 130 basis points, with Doble margins up modestly but offset by NRG declines. Test Business Sales: Increased 5%. Test Business Adjusted EBIT Margin: Increased 50 basis points to 16.4%. Test Business Orders: Increased 42%, driven by industrial shielding and EMI filters. Full-Year 2026 Adjusted EPS Guidance: Raised to $8.30 to $8.40 per share, an increase of 38% to 39% compared to fiscal 2025. Warning! GuruFocus has detected 6 Warning Sign with ESE. Is ESE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Consolidated book-to-bill of 1.21 with record backlog of $1.54 billion, indicating strong demand across all segments. Aerospace & Defense segment delivered 9% organic sales growth and 30% adjusted EBIT margins, with strong commercial and defense aerospace performance. Doble orders surged 30% year-over-year, driven by broad-based strength including a 67% increase in condition monitoring orders. Test segment orders grew 42% year-over-year, fueled by industrial shielding projects and EMI filters for data centers. Raised full-year 2026 adjusted EPS guidance to $8.30-$8.40, reflecting a 38-39% increase year-over-year. Operating cash flow more than doubled to $193 million in the first nine months, driven by advance payments on Navy contracts. Megger acquisition on track to close in Q1 FY2027, with integration planning progressing and expected to enhance utility solutions scale. Order growth was negative in the quarter, primarily due to the $364 million acquired backlog from Maritime last year and non-repeat of $82 million Navy orders. Utility Solutions Group adjusted EBIT margins declined 130 basis points, impacted by weak NRG performance and unfavorable product mix at Doble. NRG continues to face soft renewables market conditions, with year-over-year orders down considerably and expected to remain negative in Q4. Test segment sales growth of 5% lagged order growth, with margins only up 50 basis points due to inflationary pressures. Surface ship revenue experienced pushouts in the prior quarter, though recovery is on track, but the company remains cautious on program execution. Megger acquisition debt cost is expected to be around 6%, which could pressure future earnings. Doble's high-voltage cable monitoring orders have long lead times (up to a year), potentially delaying revenue recognition. Q: Can you provide more detail on the strong order acceleration at Doble, and have you seen similar trends at Megger since the deal was announced? A: Bryan Sayler (President and CEO) noted that Doble's 30% year-over-year order increase was broad-based, including a 67% increase in condition monitoring (led by large high-voltage cable monitoring orders), a 13% increase in services, a 23% increase in protection, and a 13% increase in offline testing, plus a large cybersecurity client renewal. He added that while he lacks detailed numbers, Megger is also seeing similar strength, indicating the market is broadly improving. Q: What is the updated segment revenue guidance for the full year? A: Christopher Tucker (CFO) provided updated expectations: Aerospace & Defense (excluding Maritime) is expected to grow 8% to 10%, Test is now expected to grow 10% to 12%, and Utility overall is expected to grow 4% to 6%. He also noted Doble is expected to continue its trend with low double-digit growth through the fourth quarter. Q: Why did Utility Solutions Group (USG) margins decline sequentially despite higher sales? A: Christopher Tucker (CFO) explained that while Doble's margins were up year-over-year, they were impacted by unfavorable product mix from high-growth high-voltage lines and expense timing. The primary driver was NRG, which had strong margins in the prior-year quarter but is now operating at low double-digit margins due to the soft renewables market. Q: Is the 30% incremental EBIT margin target for Aerospace & Defense still the correct go-forward rate? A: Christopher Tucker (CFO) stated that the 30% target was set for the company in total, and while A&D printed a 30% margin this quarter, the company expects to continue driving margins up through the ESCO Operating System. He suggested that parts of A&D will need to perform better than 30% to achieve continued margin expansion. Q: What is driving the strength in the defense business, and how should we think about it over the next few quarters? A: Bryan Sayler (President and CEO) indicated that growth is primarily driven by programs of record, particularly submarine programs, rather than aftermarket activity. The aftermarket business is growing at a similar rate, maintaining the ratio, but the core submarine programs are driving the significant acceleration, and the company expects this to continue. Q: When do you expect NRG to return to year-over-year growth? A: Bryan Sayler (President and CEO) stated that the fourth quarter will still see a year-over-year decline due to tough comps from the "One Big Beautiful Bill" effect last year. However, he is encouraged by sequential growth and expects a return to growth in FY27, albeit off a lower base, with high single-digit growth anticipated from that point forward. Q: Beyond US tax credit dynamics, what are the key bottlenecks for NRG, and what actions are being taken? A: Bryan Sayler (President and CEO) explained that NRG's diagnostics business for solar and wind has been impacted by developers focusing on safe-harboring projects before tax credits expired. He expects a return to broader focus, with solar recovering faster than wind due to permitting issues and tariff costs. The company has taken cost out of NRG and will integrate it as a business unit within the larger Doble-Megger platform. Q: What are the top priorities in the first 100 days post-close for the Megger acquisition? A: Bryan Sayler (President and CEO) stated that the integration team is developing a plan to be communicated shortly after closing. Key priorities include evaluating the manufacturing footprint, harmonizing product lines, developing a go-to-market strategy, and establishing a new combined identity for the enterprise. Q: How much of the improved operating cash flow is structural versus timing-related? A: Christopher Tucker (CFO) explained that the company targets a free cash flow conversion of around 100% of adjusted net earnings. The current performance above that level is due to timing of large contract payments, particularly advance payments on Navy contracts. Structurally, the company feels good about maintaining that 100% conversion rate over time. Q: What are the lead times for the condition monitoring orders secured in the quarter, and how much can we extrapolate from this strength? A: Bryan Sayler (President and CEO) noted that cable monitoring orders have the longest lead times, potentially up to a year, due to field construction requirements. Condition monitoring represents about 20% of the business. Despite the 67% order growth, the company maintains its guidance of "very, very, very high single-digit" growth, suggesting the quarter's strength may include some lumpiness. Q: Have there been any additional pushouts in surface ship revenue, and what is the updated cost of debt for the Megger deal? A: Christopher Tucker (CFO) confirmed there have been no additional pushouts and the recovery plan is unfolding as expected. For the Megger deal, the company expects the cost of debt to be around 6%, with terms locked in on SOFR Plus instruments and a deal-contingent hedge executed at slightly below 6%. The November guidance is expected to include Megger if the deal closes on schedule. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Crane NXT (CXT) came out with quarterly earnings of $1.1 per share, beating the Zacks Consensus Estimate of $1.04 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.77%. A quarter ago, it was expected that this maker of engineered industrial products would post earnings of $0.56 per share when it actually produced earnings of $0.6, delivering a surprise of +7.14%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Crane NXT, which belongs to the Zacks Technology Services industry, posted revenues of $493.2 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.07%. This compares to year-ago revenues of $404.4 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Crane NXT shares have added about 16.2% since the beginning of the year versus the S&P 500's gain of 13%. While Crane NXT has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Crane NXT was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.24 on $514.67 million in revenues for the coming quarter and $4.23 on $1.92 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Esco Technologies (ESE), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This maker of smart meters and filtration products is expected to post quarterly earnings of $2.12 per share in its upcoming report, which represents a year-over-year change of +32.5%. The consensus EPS estimate for the quarter has been revised 1.1% lower over the last 30 days to the current level. Esco Technologies' revenues are expected to be $338.51 million, up 14.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Crane NXT, Co. (CXT) : Free Stock Analysis Report ESCO Technologies Inc. (ESE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Q3 Sales increase 14% to $339 Million - Q3 GAAP EPS from Continuing Operations increases 31% to $1.26 - Q3 Adjusted EPS from Continuing Operations increases 38% to $2.20 - St. Louis, Aug. 06, 2026 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the third quarter ended June 30, 2026 (Q3 2026). Operating Highlights Q3 2026 Sales increased $43 million (14 percent) to $339 million compared to $296 million in Q3 2025. Q3 2026 organic sales increased $20 million (8 percent), and Maritime contributed $23 million of revenue growth in the quarter. Q3 2026 GAAP EPS from Continuing Operations increased 31 percent to $1.26 per share compared to $0.96 per share in Q3 2025. Q3 2026 Adjusted EPS from Continuing Operations increased 38 percent to $2.20 per share compared to $1.60 per share in Q3 2025. Q3 2026 entered orders were $410 million, with a book-to-bill ratio of 1.21. This resulted in record backlog at June 30 of $1.54 billion. Q3 2026 orders were lower than the prior year due to $364 million of acquired backlog related to the acquisition of Maritime in Q3 2025. Net cash provided by operating activities from Continuing Operations was $193 million YTD, an increase of $105 million compared to the prior year period. Bryan Sayler, Chief Executive Officer and President, commented, “Q3 was another strong quarter, highlighted by 14 percent revenue growth, 90 basis points of Adjusted EBIT margin expansion, and a 38 percent increase in Adjusted EPS. “Year to date, we have delivered double-digit organic sales growth across our aerospace, Navy, Test, and Doble businesses. This broad-based strength underscores the long-term growth dynamics across our end markets. At the same time, our backlog has increased by over $400 million year-to-date driven by momentum across our business platforms. This combination of durable growth drivers, leading market positions, and record backlog, gives us confidence in our ability to continue delivering above-market growth and we are pleased to again raise our full-year FY 2026 guidance.” Segment Performance Aerospace & Defense (A&D) Q3 2026 sales increased $31.9 million (23 percent) to $168.2 million from $136.3 million in Q3 2025. Organic sales increased $9.2 million (9 percent) and Maritime added $22.7 million of revenue growth in the quarter. Quarterly sales growth was led by strong performance in commercial aerospace and Navy. Q3 2026 EBIT increased $13.8 million to $50.4 million from $36.6 million in Q3 2025. Adjusted EBIT increased $11.2 million in Q3 2026 to $50.5 million (30.0 percent margin) from $39.3 million (28.8 percent margin) in Q3 2025. The 28 percent increase in Adjusted EBIT was driven by leverage on higher volume and price increases, partially offset by inflationary pressures and unfavorable mix. Q3 2026 Entered Orders decreased $386.7 million (66 percent) to $195.7 million, as Q3 2025 contained $364.2 million in acquired backlog related to the Maritime acquisition along with $67 million in Block V.2/VI Virginia Class and $15 million of Columbia Class orders. Book-to-bill in the quarter was 1.16 driven by higher commercial and military aerospace OEM and aftermarket orders, resulting in record backlog of $1.1 billion. Utility Solutions Group (USG) Q3 2026 sales increased $7.6 million (8 percent) to $100.0 million from $92.4 million in Q3 2025. Doble sales increased by $12.9 million (17 percent) while NRG sales decreased by $5.3 million (29 percent). Sales growth in the quarter was driven by higher protection testing, offline test equipment, and services revenue at Doble, partially offset by lower renewables revenue at NRG. Q3 2026 EBIT increased $0.5 million to $22.0 million from $21.5 million in Q3 2025. Adjusted EBIT increased $0.5 million in Q3 2026 to $22.3 million (22.3 percent margin) from $21.8 million (23.6 percent margin) in Q3 2025. The increase in Adjusted EBIT was driven by leverage on higher volume at Doble and price increases, mostly offset by EBIT reductions at NRG due to lower sales volumes. Q3 2026 entered orders increased $21.4 million (20 percent) to $126.9 million (book-to-bill of 1.27), resulting in backlog of $189.4 million. Doble orders increased $26.4 million (30 percent) to $113.3 million as the business continues to experience broad based increases in demand from utility customers. NRG orders decreased $5.0 million (27 percent) to $13.5 million, related to the expiration of U.S. renewables tax credits. RF Test & Measurement (Test) Q3 2026 sales increased $3.2 million (5 percent) to $70.9 million from $67.7 million in Q3 2025. Sales growth in the quarter was primarily driven by higher U.S Test & Measurement (EMC), and medical and industrial shielding. Q3 2026 EBIT increased $0.2 million to $10.9 million from $10.7 million in Q3 2025. Q3 2026 Adjusted EBIT increased $0.9 million to $11.6 million (16.4 percent margin) from $10.7 million (15.9 percent margin) in Q3 2025. The 8 percent increase in Adjusted EBIT was driven by leverage on higher volume and price increases, partially offset by inflationary pressures. Q3 2026 entered orders increased $25.8 million (42 percent) to $87.0 million (book-to-bill of 1.23), resulting in record backlog of $248.6 million. Orders strength in the quarter was driven by industrial shielding projects and electromagnetic interference (EMI) filters for U.S. data centers. Megger AcquisitionAs announced on April 15, 2026, ESCO has agreed to acquire Megger Group Limited. Megger will become part of ESCO’s Utility Solutions Group, creating a business of substantial scale and expanding our capabilities as a valued partner to utilities worldwide. All filings for regulatory approval are underway and we continue to anticipate closing on the transaction in Q1 of fiscal 2027. Business Outlook – FY 2026 FY 2026 Sales and Adjusted EPS Guidance Update: Raising the lower end of FY 2026 Sales guidance and now expect Sales to be in the range of $1.30 to $1.33 billion (19 to 21 percent growth over the prior year). Raising full year Adjusted EPS guidance to a range of $8.30 - $8.40 per share (38 to 39 percent growth), which reflects a midpoint increase of $0.70 per share from our initial November guidance ($7.50 - $7.80) and $0.22 per share from our more recent May guidance update of ($8.00 - $8.25). Q4’26 Adjusted EPS is expected to be in the range of $2.55 - $2.65 per share (10 to 14 percent growth compared to Q4’25 Adjusted EPS). Dividend PaymentThe next quarterly cash dividend of $0.08 per share will be paid on October 15, 2026 to stockholders of record on October 1, 2026. Conference CallThe Company will host a conference call today, August 6, at 4:00 p.m. Central Time, to discuss the Company’s Q3 2026 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website. Forward-Looking StatementsStatements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2026, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws. Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and the following: the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars including the conflicts involving Iran and Lebanon, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components; restrictions or closures of critical supply routes such as the Strait of Hormuz; other supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses. Non-GAAP Financial MeasuresThe financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures. EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP. About ESCOESCO Technologies is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products, advanced composites, as well as signature and power management solutions for aviation, Navy, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit ESCO’s website at www.escotechnologies.com. SOURCE ESCO Technologies Inc.Kate Lowrey, Vice President of Investor Relations, (314) 213-7277

Keel Infrastructure Corp. KEEL is scheduled to report second-quarter 2026 results on Aug. 10, after market close. During the first quarter of 2026, earnings surpassed the estimate by 9.1%. Keel Infrastructure Corp price-eps-surprise | Keel Infrastructure Corp Quote The Zacks Consensus Estimate for the company’s revenues is nearly kept at $35 million, suggesting a 55.1% year-over-year plunge. Keel Infrastructure’s top line is expected to have declined due to its active pivot to High-Performance Computing (HPC) and AI data centers from its legacy Bitcoin mining. This strategy is kept in place to transition power capacity toward HPC/AI data centers, which is facilitated by decommissioning operations in Latin America and the Moses Lake site in Washington. During the first-quarter 2026 earnings call, Benjamin Gagnon, the CEO, stated that Bitcoin’s network hashrate should decline over time, affecting operational mining revenues. The consensus estimate for loss per share is pinned at 8 cents, whereas it incurred a loss of 2 cents in the year-ago quarter. The bottom line is expected to show the pressure of increasing operating expenses, driven by rising power and site infrastructure costs. It is anticipated to have moved up further on the back of rising selling, general and administrative expenses for strategic pivot. Our proven model does not conclusively predict an earnings beat for Keel Infrastructure this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter. KEEL has an Earnings ESP of -56.00% and a Zacks Rank of 3 at present. Here are a few stocks from the broader Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this time around. ESCO Technologies ESE: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is $338.5 million, hinting at a 14.2% increase from the year-ago quarter’s actual. For earnings, the consensus estimate is pegged at $2.12 per share, suggesting a 32.5% rally from the year-ago quarter’s reported number. The company surpassed earnings in the first quarter of 2026 by 0.5%. ESE has an Earnings ESP of +1.06% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. The company is scheduled to announce second-quarter 2026 results on Aug. 6. Nayax Ltd. NYAX: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is $120.5 million, indicating 26.1% year-over-year growth. For earnings, the consensus estimate is pinned at 9 cents per share, suggesting a 43.8% plunge from the year-ago quarter’s actual. Over the four trailing quarters, the company surpassed earnings in two quarters and missed in the remaining two, with a negative average earnings surprise of 2.4%. NYAX has an Earnings ESP of +7.14% and a Zacks Rank of 3 at present. The company is scheduled to announce second-quarter 2026 results on Aug. 10. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Keel Infrastructure Corp (KEEL) : Free Stock Analysis Report ESCO Technologies Inc. (ESE) : Free Stock Analysis Report Nayax Ltd. (NYAX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research