Gates Industrial (NYSE:GTES) Issues Quarterly Earnings Results

Key Points

• Gates Industrial beat quarterly estimates: Adjusted EPS was $0.44 versus the $0.42 consensus, while revenue rose 6.6% year over year to $941.6 million, exceeding estimates of $925.4 million.
• Management raised its FY 2026 outlook for adjusted EPS to $1.62–$1.70 and expects $800–$830 million in adjusted EBITDA, supported by improving industrial demand and growth in personal mobility and data-center applications.
• Some margin pressures remain: Fluid Power’s adjusted EBITDA margin declined 120 basis points due to footprint realignment and investments, while oil-related input-cost inflation continues to weigh on profitability.

Gates Industrial (NYSE:GTES - Get Free Report) announced its quarterly earnings results on Friday. The company reported $0.44 EPS for the quarter, beating the consensus estimate of $0.42 by $0.02, FiscalAI reports. Gates Industrial had a net margin of 7.23% and a return on equity of 10.00%. The company had revenue of $941.60 million for the quarter, compared to analyst estimates of $925.44 million. During the same period in the prior year, the firm posted $0.39 earnings per share. The firm's revenue was up 6.6% on a year-over-year basis. Gates Industrial updated its FY 2026 guidance to 1.620-1.700 EPS.

Here are the key takeaways from Gates Industrial's conference call:

• Positive Sentiment: Gates reported record quarterly sales of $942 million, up 6.6% year over year, with core revenue growth of 4.9%, adjusted EBITDA margin of 22.5%, and adjusted EPS up 13% to a record $0.44.
• Positive Sentiment: Broad-based demand improved, led by double-digit industrial OEM growth, approximately 25% growth in personal mobility, 20%+ growth in commercial on-highway, and accelerating APAC and EMEA sales; book-to-bill remained above one.
• Positive Sentiment: Management raised full-year 2026 guidance, including core sales growth of 2.5%-4.5%, adjusted EBITDA of $800 million-$830 million, and adjusted EPS of $1.62-$1.70. The company expects roughly 6% core sales growth and adjusted EBITDA margins of at least 23.5% in the second half.
• Positive Sentiment: Strategic growth initiatives are gaining traction, including personal-mobility belt conversions and data-center applications, where sales more than doubled year over year and are expected to reach $100 million-$200 million by 2028.
• Negative Sentiment: Fluid Power’s adjusted EBITDA margin declined 120 basis points due to footprint realignment and enterprise investments, while oil-related input-cost inflation is persisting; pricing actions are expected to keep the company at least price-cost neutral in the second half.

Gates Industrial Stock Performance

Shares of NYSE GTES traded up $2.23 during midday trading on Friday, reaching $28.01. 4,235,054 shares of the company were exchanged, compared to its average volume of 2,274,580. The company has a current ratio of 3.67, a quick ratio of 2.66 and a debt-to-equity ratio of 0.61. Gates Industrial has a 1 year low of $20.88 and a 1 year high of $29.17. The stock has a fifty day simple moving average of $26.63 and a 200 day simple moving average of $25.36. The stock has a market cap of $7.12 billion, a P/E ratio of 29.18 and a beta of 1.25.

Institutional Trading of Gates Industrial

Hedge funds have recently added to or reduced their stakes in the stock. Los Angeles Capital Management LLC purchased a new position in shares of Gates Industrial in the 4th quarter valued at approximately $26,000. Transamerica Financial Advisors LLC raised its stake in shares of Gates Industrial by 51.9% during the fourth quarter. Transamerica Financial Advisors LLC now owns 1,577 shares of the company's stock worth $34,000 after purchasing an additional 539 shares during the last quarter. Northwestern Mutual Wealth Management Co. lifted its holdings in shares of Gates Industrial by 273.2% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 2,911 shares of the company's stock worth $67,000 after purchasing an additional 2,131 shares during the period. EverSource Wealth Advisors LLC lifted its holdings in shares of Gates Industrial by 1,976.9% during the second quarter. EverSource Wealth Advisors LLC now owns 2,970 shares of the company's stock worth $68,000 after purchasing an additional 2,827 shares during the period. Finally, Quadrant Capital Group LLC purchased a new position in Gates Industrial in the 3rd quarter valued at $73,000. 98.50% of the stock is owned by institutional investors and hedge funds.

More Gates Industrial News

Here are the key news stories impacting Gates Industrial this week:

• Positive Sentiment: Gates reported second-quarter sales of $941.6 million, up 6.6% year over year, with core sales increasing 4.9%. Revenue exceeded analyst expectations of approximately $925.4 million, indicating solid demand across the business. Gates Industrial Reports Second-Quarter 2026 Results
• Positive Sentiment: Adjusted earnings were $0.44 per share, above the $0.42 analyst consensus and up from $0.39 a year earlier. The company also reported $170.9 million of net income, or $0.67 per diluted share, under its reported accounting measure. Gates Industrial Tops Q2 Earnings and Revenue Estimates
• Positive Sentiment: Gates raised or reaffirmed a favorable FY 2026 adjusted EPS outlook of $1.62 to $1.70, with the midpoint above the current consensus estimate of $1.62. This suggests management expects earnings momentum to continue. Gates Industrial Q2 2026 Earnings Call Transcript
• Neutral Sentiment: Full-year revenue guidance of $3.5 billion to $3.6 billion reaches the consensus estimate only at the upper end; the midpoint is modestly below expectations. Investors may therefore focus on whether stronger core sales can drive results toward the high end of the range. Gates Industrial Earnings Report

Wall Street Analysts Forecast Growth

A number of analysts recently issued reports on GTES shares. Robert W. Baird decreased their target price on Gates Industrial from $39.00 to $37.00 and set an "outperform" rating for the company in a research report on Monday, May 4th. Wall Street Zen lowered Gates Industrial from a "buy" rating to a "hold" rating in a research report on Saturday, July 25th. Morgan Stanley increased their price objective on Gates Industrial from $27.00 to $28.00 and gave the company an "equal weight" rating in a report on Friday, May 29th. Weiss Ratings restated a "hold (c+)" rating on shares of Gates Industrial in a research report on Monday, June 29th. Finally, Wolfe Research reaffirmed an "outperform" rating and issued a $33.00 target price on shares of Gates Industrial in a report on Thursday, July 9th. Seven analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $31.50.

About Gates Industrial

Gates Industrial Corporation PLC NYSE: GTES is a leading global manufacturer of engineered power transmission belts and fluid power products. The company's portfolio includes synchronous belts, V-belts, hose assemblies, fittings and hydraulic components designed to support a wide range of industrial and automotive applications. Gates Industrial serves sectors such as agriculture, mining, construction, manufacturing, transportation and consumer markets, offering solutions that improve performance, reliability and efficiency in demanding operating environments.

In its power transmission segment, Gates Industrial produces high-strength belts engineered for precise motion control and minimal maintenance.

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