Twin Disc (NASDAQ:TWIN) Posts Quarterly Earnings Results, Beats Expectations By $0.23 EPS

Key Points

• Twin Disc reported quarterly EPS of $0.24, beating the $0.01 consensus estimate by $0.23. Revenue rose 10.9% to $88.75 million, slightly below the $89.60 million forecast, while net income was $3.4 million versus a loss a year earlier.
• The company’s six-month backlog reached a record $190.6 million, with defense making up 24%; defense backlog more than doubled year over year, supported by NATO, Katsa, and U.S. Navy programs.
• Gross margin held at 28.7%, and management expects margins to stay broadly in line with fiscal 2026. Fiscal 2027 free-cash-flow conversion is forecast at 20%–40%, below its long-term target, as Twin Disc plans increased investment and about $25 million in capital expenditures.

Twin Disc (NASDAQ:TWIN - Get Free Report) announced its quarterly earnings results on Wednesday. The industrial products company reported $0.24 EPS for the quarter, beating analysts' consensus estimates of $0.01 by $0.23, Zacks reports. Twin Disc had a net margin of 9.06% and a return on equity of 6.78%. The firm had revenue of $88.75 million during the quarter, compared to the consensus estimate of $89.60 million.

Here are the key takeaways from Twin Disc's conference call:

• Revenue rose 10.9% to $88.7 million, while net income reached $3.4 million versus a year-ago loss and EBITDA increased 62.6%. Management attributed growth to defense, Veth products, stronger oil and gas demand, and broad market strength.
• Six-month backlog hit a record $190.6 million, up from $178.3 million at fiscal year-end. Defense represented 24% of backlog, and defense backlog more than doubled year over year, supported by NATO, Katsa, and U.S. Navy programs.
• Gross margin was flat year over year at 28.7%, and management expects margins to remain broadly in line with fiscal 2026. For fiscal 2027, free-cash-flow conversion is expected at 20%–40%, below the company’s long-term target above 60%, as it increases growth investment and targets about $25 million in capital expenditures.
• U.S. Navy orders for the first 30 unmanned vessels are beginning to enter the backlog, with another increase expected in the December quarter, followed potentially by a pause for several quarters. Management said the defense opportunity pipeline continues to grow, though the timing of further orders remains uncertain.

Twin Disc Trading Up 4.1%

Shares of Twin Disc stock traded up $1.03 on Wednesday, hitting $26.07. 56,874 shares of the company traded hands, compared to its average volume of 81,448. The company has a current ratio of 2.35, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13. The company has a market cap of $379.09 million, a PE ratio of 10.95 and a beta of 0.50. The stock's 50 day moving average price is $25.13 and its 200-day moving average price is $20.60. Twin Disc has a 52 week low of $14.22 and a 52 week high of $29.24.

Twin Disc Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 1st. Stockholders of record on Wednesday, November 18th will be paid a dividend of $0.05 per share. This represents a $0.20 annualized dividend and a dividend yield of 0.8%. The ex-dividend date of this dividend is Wednesday, November 18th. Twin Disc's payout ratio is currently 8.40%.

Wall Street Analysts Forecast Growth

TWIN has been the topic of a number of analyst reports. Lake Street Capital started coverage on shares of Twin Disc in a research report on Thursday, July 9th. They set a "buy" rating and a $30.00 price objective on the stock. Wall Street Zen raised shares of Twin Disc from a "buy" rating to a "strong-buy" rating in a research note on Saturday, September 12th. Finally, Weiss Ratings raised shares of Twin Disc from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Thursday, October 8th. Two equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. Based on data from MarketBeat.com, Twin Disc currently has a consensus rating of "Moderate Buy" and an average target price of $30.00.

Insider Transactions at Twin Disc

In other Twin Disc news, CFO Jeffrey Knutson sold 7,482 shares of the firm's stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $24.25, for a total transaction of $181,438.50. Following the transaction, the chief financial officer directly owned 164,891 shares in the company, valued at $3,998,606.75. This trade represents a 4.34% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Insiders sold a total of 17,686 shares of company stock valued at $417,606 over the last quarter. 21.10% of the stock is owned by corporate insiders.

About Twin Disc

Twin Disc, Inc designs, manufactures and sells power transmission and propulsion systems for marine, industrial and specialty vehicle applications. The company's products are used to transfer and control engine power in commercial and recreational boats, workboats, military vessels, construction equipment and other heavy-duty machinery.

Its product portfolio includes marine transmissions, propulsion systems, surface drives, electronic controls, boat-management systems, power take-offs, torque converters and industrial transmissions.

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