ESAB (NYSE:ESAB) Announces Earnings Results, Misses Expectations By $0.03 EPS

Key Points

• ESAB reported quarterly EPS of $1.30, missing the $1.33 consensus by $0.03 and declining from $1.32 a year earlier. Revenue rose 13.3% year over year to $824.5 million, exceeding analysts’ $786.7 million estimate.
• On the earnings call, the company cited 14% sales growth, 17% adjusted EBITDA growth, and a 40-basis-point expansion in adjusted EBITDA margin to 19.8%; both major regions posted organic growth.
• ESAB narrowed its 2026 adjusted EBITDA and EPS outlook, citing persistent inflation and freight costs. Adjusted free cash flow fell to $60 million from $86 million, while net leverage stood at 3.4 times.

ESAB (NYSE:ESAB - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $1.30 earnings per share for the quarter, missing the consensus estimate of $1.33 by ($0.03), Zacks reports. The business had revenue of $824.52 million during the quarter, compared to analysts' expectations of $786.68 million. ESAB had a return on equity of 14.48% and a net margin of 5.75%. The firm's revenue for the quarter was up 13.3% on a year-over-year basis. During the same period in the prior year, the firm posted $1.32 EPS.

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

• Sales rose 14% year over year to $787 million, with 2.3% organic growth; adjusted EBITDA increased 17% to $156 million, and adjusted EBITDA margin expanded 40 basis points to 19.8%. Both major regions delivered organic growth, while U.S. and Canada and APAC were particularly strong.
• ESAB said its combined fabrication, welding, gas control, and inspection offering is generating customer interest, with a cross-selling funnel of about $465 million and 10–15 opportunities in late stages of evaluation. However, management cautioned that conversion is still early and did not provide a timeline or expected realization rate.
• Management expects Q4 to be the strongest quarter of 2026 for organic growth, margins, and cash flow, citing a solid October start and mid-single-digit order growth. It also expects improved South American performance and sees EWM as a growth opportunity, particularly as it expands into new geographies and customer accounts.
• ESAB narrowed its 2026 outlook to $603–$607 million in adjusted EBITDA and $5.28–$5.33 in adjusted EPS, citing persistent inflation and freight costs, while protecting investment in equipment growth and strategic AI. Adjusted free cash flow fell to $60 million from $86 million, largely due to higher acquisition-related interest and additional inventory; net leverage was 3.4 times.

ESAB Price Performance

NYSE ESAB traded up $2.20 during trading hours on Wednesday, reaching $78.25. The company's stock had a trading volume of 1,467,200 shares, compared to its average volume of 1,224,134. The company has a quick ratio of 1.22, a current ratio of 1.96 and a debt-to-equity ratio of 0.99. ESAB has a 1 year low of $62.74 and a 1 year high of $137.42. The firm's 50-day moving average price is $69.90 and its 200-day moving average price is $92.92. The company has a market capitalization of $4.86 billion, a price-to-earnings ratio of 14.32, a PEG ratio of 1.21 and a beta of 1.17.

ESAB Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, October 16th. Shareholders of record on Friday, October 2nd were issued a dividend of $0.12 per share. The ex-dividend date of this dividend was Friday, October 2nd. This represents a $0.48 dividend on an annualized basis and a yield of 0.6%. ESAB's dividend payout ratio (DPR) is currently 17.20%.

More ESAB News

Here are the key news stories impacting ESAB this week:

• Positive Sentiment: Q3 revenue rose 13.3% year over year to $824.5 million, topping the cited analyst estimate of $786.7 million. The earnings call also emphasized strong growth and improving margins, supporting the more optimistic investor read-through. ESAB Earnings Call Highlights Strong Growth and Margin Gains
• Negative Sentiment: Quarterly EPS was $1.30, below the $1.33 consensus and down from $1.32 a year earlier. The modest shortfall could temper the positive response to revenue growth. ESAB Q3 Earnings Lag Estimates

Insider Transactions at ESAB

In related news, Director Rhonda L. Jordan sold 1,000 shares of the business's stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $95.00, for a total value of $95,000.00. Following the sale, the director directly owned 1,000 shares in the company, valued at approximately $95,000. The trade was a 50.00% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Corporate insiders own 7.20% of the company's stock.

Analyst Upgrades and Downgrades

A number of brokerages recently weighed in on ESAB. Weiss Ratings cut ESAB from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, August 11th. JPMorgan Chase & Co. dropped their price target on ESAB from $125.00 to $95.00 and set an "overweight" rating for the company in a research note on Thursday, October 8th. Stifel Nicolaus set a $114.00 target price on ESAB in a research note on Monday, October 19th. Roth Capital reaffirmed a "buy" rating and issued a $133.00 price target (down from $151.00) on shares of ESAB in a research note on Tuesday, September 15th. Finally, Oppenheimer decreased their price objective on ESAB from $135.00 to $110.00 and set an "outperform" rating for the company in a report on Wednesday, October 21st. Six analysts have rated the stock with a Buy rating and one has given a Hold rating to the company's stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $118.67.

About ESAB

ESAB Corporation NYSE: ESAB is a global provider of welding and cutting technologies. The company develops and supplies equipment, consumables, automation solutions and related products used to join, cut and process metals across industrial and commercial applications.

Its product portfolio includes welding machines, cutting systems, welding electrodes and wires, filler metals, gas-control equipment, plasma and oxyfuel technologies, and digital or automated solutions. ESAB also offers products and services designed to support fabrication, manufacturing, construction, transportation, energy and maintenance operations.

ESAB serves customers in the Americas, Europe, the Middle East, Africa and the Asia-Pacific region through a portfolio of established brands and distribution channels.

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