UL Solutions (NYSE:ULS) Issues Earnings Results, Beats Expectations By $0.03 EPS

Key Points

• UL Solutions beat quarterly expectations: EPS was $0.59 versus the $0.56 consensus, while revenue rose 5.2% year over year to $816 million. Adjusted EBITDA increased 11.2% to a record $219 million, with margin expanding to 26.8%.
• Management reaffirmed its 2026 outlook for mid-single-digit organic revenue growth and an approximately 27% adjusted EBITDA margin. The Eurofins Electrical & Electronics acquisition is still expected to close in the fourth quarter.
• Shares fell 8.7% to $83.10 despite the earnings beat, amid pressure from a 17.5% revenue decline in the Risk and Compliance segment, higher expenses and increased capital-spending expectations.

UL Solutions (NYSE:ULS - Get Free Report) released its quarterly earnings results on Tuesday. The company reported $0.59 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.56 by $0.03, FiscalAI reports. UL Solutions had a net margin of 11.24% and a return on equity of 30.99%. The firm had revenue of $816.00 million for the quarter, compared to the consensus estimate of $813.62 million. During the same quarter in the previous year, the firm posted $0.52 EPS. The firm's quarterly revenue was up 5.2% on a year-over-year basis.

Here are the key takeaways from UL Solutions' conference call:

• Strong second-quarter execution: Revenue rose 5.2% to $816 million, organic growth was 6.6%, and adjusted EBITDA increased 11.2% to a record $219 million. Adjusted EBITDA margin expanded 140 basis points to 26.8%, while adjusted EPS rose 13.5% to $0.59.
• Industrial and consumer demand remained healthy, supported by electrification, energy infrastructure, automation, AI data centers and product innovation. Consumer adjusted EBITDA increased 24.2% with a 310-basis-point margin improvement, while industrial organic revenue grew 7.2%.
• Management reaffirmed its 2026 outlook for mid-single-digit organic revenue growth and approximately 27% adjusted EBITDA margin, despite an expected roughly 1% revenue drag from restructuring-related business exits. The Eurofins Electrical & Electronics acquisition remains expected to close in the fourth quarter, and the DQS stake sale is on track for the second half.
• The Risk and Compliance segment’s revenue fell 17.5% because of the EHS software divestiture, while performance-based compensation, professional fees and expected acquisition-related integration costs are pressuring expenses. Capital expenditures were also raised to approximately 8.5% of revenue for 2026, although management characterized the spending as growth-oriented laboratory investment.

UL Solutions Stock Down 8.7%

NYSE:ULS traded down $7.95 during mid-day trading on Tuesday, reaching $83.10. The stock had a trading volume of 223,077 shares, compared to its average volume of 927,823. The company has a debt-to-equity ratio of 0.27, a current ratio of 1.16 and a quick ratio of 1.16. The company has a market capitalization of $16.75 billion, a price-to-earnings ratio of 48.53, a price-to-earnings-growth ratio of 3.52 and a beta of 0.71. UL Solutions has a 1-year low of $61.64 and a 1-year high of $107.54. The stock's 50 day simple moving average is $93.38 and its two-hundred day simple moving average is $87.33.

UL Solutions Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Monday, June 8th. Investors of record on Friday, May 29th were paid a $0.145 dividend. This represents a $0.58 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date was Friday, May 29th. UL Solutions's dividend payout ratio (DPR) is 33.92%.

Insider Activity at UL Solutions

In other UL Solutions news, insider Gitte Schjotz sold 12,015 shares of the stock in a transaction that occurred on Tuesday, June 2nd. The stock was sold at an average price of $99.71, for a total transaction of $1,198,015.65. Following the transaction, the insider owned 69,206 shares of the company's stock, valued at $6,900,530.26. This trade represents a 14.79% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, EVP Alberto Uggetti sold 6,100 shares of the firm's stock in a transaction on Monday, May 11th. The stock was sold at an average price of $100.00, for a total value of $610,000.00. Following the transaction, the executive vice president owned 10,307 shares in the company, valued at $1,030,700. This trade represents a 37.18% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 53,205 shares of company stock worth $5,315,675 over the last quarter. 1.20% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of ULS. Northwestern Mutual Wealth Management Co. raised its stake in UL Solutions by 3,070.0% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 634 shares of the company's stock worth $46,000 after acquiring an additional 614 shares during the period. Rhumbline Advisers acquired a new position in UL Solutions in the first quarter valued at approximately $49,000. CIBC Private Wealth Group LLC boosted its stake in UL Solutions by 112.7% in the fourth quarter. CIBC Private Wealth Group LLC now owns 904 shares of the company's stock valued at $71,000 after acquiring an additional 479 shares during the period. PNC Financial Services Group Inc. grew its holdings in shares of UL Solutions by 60.1% during the fourth quarter. PNC Financial Services Group Inc. now owns 1,383 shares of the company's stock valued at $109,000 after purchasing an additional 519 shares during the last quarter. Finally, US Bancorp DE grew its holdings in shares of UL Solutions by 253.9% during the third quarter. US Bancorp DE now owns 1,596 shares of the company's stock valued at $113,000 after purchasing an additional 1,145 shares during the last quarter.

Analysts Set New Price Targets

Several analysts have recently weighed in on ULS shares. The Goldman Sachs Group restated a "neutral" rating on shares of UL Solutions in a research note on Wednesday, May 6th. Wall Street Zen downgraded UL Solutions from a "buy" rating to a "hold" rating in a report on Saturday, July 25th. Raymond James Financial restated an "outperform" rating and set a $115.00 price objective on shares of UL Solutions in a research note on Wednesday, May 6th. UBS Group upgraded UL Solutions from a "neutral" rating to a "buy" rating and set a $110.00 price objective on the stock in a report on Tuesday, July 14th. Finally, Wells Fargo & Company upped their target price on UL Solutions from $102.00 to $120.00 and gave the company an "overweight" rating in a research report on Wednesday, May 6th. Six equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $101.54.

About UL Solutions

UL Solutions NYSE: ULS is a global safety science company that provides testing, inspection, certification, advisory and digital solutions designed to help organizations manage risk, ensure regulatory compliance and drive innovation. With roots dating back to 1894 when it was founded as Underwriters' Electrical Bureau, the company rebranded as UL Solutions following its initial public offering in 2022. Headquartered in Northbrook, Illinois, UL Solutions operates independently to serve a broad range of industries with an emphasis on product safety, performance and sustainability.

The company's core services include standards development, product testing and certification for sectors such as building products, consumer electronics, automotive, life sciences, energy and industrial equipment.

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