ATS (NYSE:ATS) Announces Quarterly Earnings Results

Key Points

• ATS missed quarterly expectations: Adjusted EPS was $0.25 versus the $0.28 consensus, while revenue fell 5.8% year over year to $488.4 million, below analysts’ $509.7 million estimate. Profitability also declined from the prior-year quarter.
• Near-term outlook remains pressured: Second-quarter revenue guidance of $476.8 million–$505.7 million was below consensus, and management said a second-half recovery, stronger orders and large project awards are needed to support fiscal 2027 growth.
• Cost savings and select growth areas offer potential upside: ATS launched an 18-month fixed-cost transformation program targeting roughly CAD 20 million in annual savings and approximately 250 basis points of margin improvement, while radiopharmaceuticals, energy and services continue to support demand.

ATS (NYSE:ATS - Get Free Report) issued its quarterly earnings results on Thursday. The company reported $0.25 earnings per share for the quarter, missing analysts' consensus estimates of $0.28 by ($0.03), Zacks reports. ATS had a return on equity of 9.00% and a net margin of 1.60%.The business had revenue of $488.38 million for the quarter, compared to analysts' expectations of $509.71 million. During the same period in the prior year, the company earned $0.41 EPS. The company's revenue for the quarter was down 5.8% compared to the same quarter last year.

Here are the key takeaways from ATS's conference call:

• Q1 performance declined: Adjusted revenue fell 5.2% year over year to CAD 698 million, while adjusted earnings from operations declined 13.4% to CAD 68.1 million, reflecting a lower opening backlog, project timing, and reduced transportation activity.
• Near-term execution remains dependent on a second-half recovery. ATS expects Q2 revenue of CAD 660 million–CAD 700 million and said achieving modest fiscal 2027 organic growth will require stronger order rates and the conversion of larger awards in the back half of the year.
• Cost transformation targets significant margin expansion. The 18-month program is expected to generate approximately CAD 20 million in annualized savings from its initial European phase, representing about 30% of the anticipated overall opportunity; management estimates the program could contribute roughly 250 basis points of margin improvement over time.
• Radiopharmaceuticals, energy, and services remain key growth drivers. Life sciences book-to-bill excluding GLP-1 activity was approximately 1.1 times, radiopharma backlog has become highly material, energy demand is supported by nuclear and data-center power investment, and service revenue grew 11% year over year.
• Management maintained financial flexibility while pursuing its strategy. Backlog was approximately CAD 1.9 billion, leverage ended the quarter at 2.9 times net debt to adjusted EBITDA within the targeted range, and the acquisition pipeline remains active, although operating cash flow was negative CAD 10 million due to billing and collection timing.

ATS Trading Up 3.1%

Shares of NYSE ATS traded up $0.64 during trading on Friday, hitting $21.17. 428,320 shares of the company traded hands, compared to its average volume of 195,396. The firm has a market capitalization of $2.08 billion, a P/E ratio of 17.40 and a beta of 1.22. The company has a quick ratio of 1.36, a current ratio of 1.64 and a debt-to-equity ratio of 0.78. The company has a 50-day moving average price of $27.35 and a 200-day moving average price of $29.80. ATS has a 1 year low of $19.14 and a 1 year high of $35.82.

Key Headlines Impacting ATS

Here are the key news stories impacting ATS this week:

• Positive Sentiment: ATS announced a Fixed Cost Transformation Program following a portfolio review. The initiative is intended to improve the company’s cost structure and could support margins and cash flow over time, although implementation costs may arise first. ATS Reports First Quarter Fiscal 2027 Results and Announces a Fixed Cost Transformation Program
• Neutral Sentiment: Shareholders approved the board, auditor and executive compensation policy at ATS’s August 6 annual meeting. The results provide governance continuity but do not materially change the company’s operating outlook. ATS Corporation Shareholders Back Board, Auditor and Pay Policy at 2026 AGM
• Negative Sentiment: Fiscal 2027 first-quarter adjusted earnings were $0.25 per share, below the $0.28 consensus estimate and down from $0.41 a year earlier. Revenue fell 5.8% year over year to $488.4 million, missing analysts’ approximately $509.7 million forecast, while margins and profitability also declined. ATS Q1 Earnings and Revenues Lag Estimates
• Negative Sentiment: ATS’s second-quarter fiscal 2027 revenue guidance of $476.8 million to $505.7 million was below the roughly $509.8 million analyst consensus. The outlook reinforces concerns about near-term demand and makes the planned cost reductions more important to the investment case. ATS Corporation 2027 Q1 Results Presentation

Analyst Ratings Changes

A number of brokerages have recently commented on ATS. Royal Bank Of Canada lowered their price objective on ATS from $51.00 to $50.00 and set an "outperform" rating for the company in a research report on Friday, May 29th. Scotiabank reissued an "outperform" rating on shares of ATS in a research note on Tuesday, April 28th. Weiss Ratings lowered ATS from a "sell (d+)" rating to a "sell (d)" rating in a research note on Thursday. Wall Street Zen cut ATS from a "buy" rating to a "hold" rating in a report on Sunday, July 12th. Finally, Desjardins initiated coverage on shares of ATS in a research note on Tuesday, June 16th. They set a "buy" rating for the company. Four analysts have rated the stock with a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, the company presently has a consensus rating of "Hold" and an average price target of $42.50.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Invesco Ltd. grew its position in ATS by 6.3% during the fourth quarter. Invesco Ltd. now owns 1,272,222 shares of the company's stock valued at $35,037,000 after acquiring an additional 75,490 shares during the period. SkyView Investment Advisors LLC purchased a new position in shares of ATS in the 4th quarter worth about $302,000. Guardian Capital LP acquired a new position in shares of ATS in the 4th quarter valued at about $1,298,000. Toronto Dominion Bank lifted its stake in shares of ATS by 8.6% in the 4th quarter. Toronto Dominion Bank now owns 81,910 shares of the company's stock valued at $2,257,000 after purchasing an additional 6,455 shares in the last quarter. Finally, Numerai GP LLC purchased a new stake in shares of ATS during the 4th quarter worth about $449,000. Institutional investors and hedge funds own 75.84% of the company's stock.

ATS Company Profile

ATS Corporation NYSE: ATS is a Canada-based global provider of automation and energy solutions. Headquartered in Cambridge, Ontario, the company specializes in the design, engineering and manufacturing of custom automation and test systems, as well as fluid handling and control products. Since its founding in 1978, ATS has focused on delivering integrated hardware and software solutions that help original equipment manufacturers (OEMs) improve efficiency, quality and throughput across a range of industries.

Through its Automation segment, ATS develops bespoke assembly and testing platforms for sectors such as life sciences, consumer electronics, automotive and industrial equipment.

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 contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source