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CVV Stock Declines Post-Q1 Earnings Despite Return to Profitability
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Shares of CVD Equipment Corporation (CVV - Free Report) have lost 10.3% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 Index’s 1.3% gain over the same time frame. Over the past month, the stock has lost 15.3% against the S&P 500’s 11.8% gain.
Earnings Snapshot
CVD Equipment reported a significant turnaround in the first quarter of 2025. Revenues rose 68.9% year over year to $8.3 million from $4.9 million in the same quarter last year, also marking a 12.2% increase from the fourth quarter of 2024. The top-line growth was primarily driven by strong performance in the CVD Equipment segment, attributed to two major contracts in the industrial and aerospace markets. The SDC segment, which supplies gas delivery equipment, also maintained strong demand.
The company’s gross profit increased to $2.7 million from $0.8 million in the year-ago period, boosting the gross margin to 32.4% from 16.2%. This margin expansion stemmed from increased revenue, better overhead absorption and improved profitability on ongoing contracts.
Operating expenses were largely flat year over year, totaling $2.4 million. Operating income stood at $0.3 million against a loss of $1.6 million in the prior-year quarter. Net income was $0.4 million, or $0.05 per diluted share, against a loss of $1.5 million, or $0.22 per share, in the first quarter of 2024. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Operational Metrics and Orders
Despite the notable revenue growth, CVD Equipment faced a decline in order activity. First-quarter 2025 orders totaled $2.8 million, primarily from the SDC segment, falling short of expectations and down from prior levels. This softness in order intake led to a reduction in backlog from $19.4 million at the end of Dec. 31, 2024, to $13.8 million at the end of March 2025.
However, CVD Equipment disclosed that it secured a $1.2 million semiconductor system order in early April 2025, which is expected to support near-term revenue for its CVD Equipment segment.
CVD Equipment Corporation Price, Consensus and EPS Surprise
CEO Emmanuel Lakios acknowledged the improved revenue and profitability while cautioning that market conditions remain volatile. He pointed to the recently imposed tariffs as a new challenge, potentially raising the cost of components and materials and contributing to broader economic uncertainty, which could affect future order rates.
To address demand variability, the company implemented cost control measures, including workforce reductions during the quarter. Management emphasized a commitment to balancing growth initiatives with prudent cost management to ensure long-term profitability and positive cash flow.
CFO Richard Catalano noted that while the cash balance decreased from $12.6 million at the end of Dec. 31, 2024, to $10.2 million at the end of March 31, 2025, CVV’s working capital improved to $14.5 million from $13.8 million at the end of Dec. 31, 2024. The cash decline was attributed primarily to costs incurred on contracts in progress, reflected in a $3 million increase in contract assets and a $1.3 million drop in contract liabilities.
Influencing Factors
The quarter’s performance was largely driven by robust execution in the CVD Equipment segment. However, fluctuations in customer orders and the specialized nature of the company’s markets — such as aerospace, high-power electronics and EV battery materials — naturally introduce revenue volatility. CFO Richard Catalano cited inflationary pressures, customer delivery schedules, and geopolitical uncertainties, including tariffs, as key variables that could impact future performance.
CVD Equipment highlighted that cash and cash equivalents declined to $10.2 million from $12.6 million at the end of 2024, mainly due to investments in contracts in progress. Nevertheless, management expressed confidence that current cash reserves and projected operating cash flow will meet working capital needs over the next 12 months.
Other Developments
During the quarter, CVD Equipment implemented a restructuring initiative aimed at aligning operating costs with customer demand. This involved a workforce reduction and a broader review of cost efficiencies. Management continues to monitor market conditions and remains open to further operational adjustments as necessary to preserve financial flexibility.
No acquisitions or divestitures were reported during the quarter.
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CVV Stock Declines Post-Q1 Earnings Despite Return to Profitability
Shares of CVD Equipment Corporation (CVV - Free Report) have lost 10.3% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 Index’s 1.3% gain over the same time frame. Over the past month, the stock has lost 15.3% against the S&P 500’s 11.8% gain.
Earnings Snapshot
CVD Equipment reported a significant turnaround in the first quarter of 2025. Revenues rose 68.9% year over year to $8.3 million from $4.9 million in the same quarter last year, also marking a 12.2% increase from the fourth quarter of 2024. The top-line growth was primarily driven by strong performance in the CVD Equipment segment, attributed to two major contracts in the industrial and aerospace markets. The SDC segment, which supplies gas delivery equipment, also maintained strong demand.
The company’s gross profit increased to $2.7 million from $0.8 million in the year-ago period, boosting the gross margin to 32.4% from 16.2%. This margin expansion stemmed from increased revenue, better overhead absorption and improved profitability on ongoing contracts.
Operating expenses were largely flat year over year, totaling $2.4 million. Operating income stood at $0.3 million against a loss of $1.6 million in the prior-year quarter. Net income was $0.4 million, or $0.05 per diluted share, against a loss of $1.5 million, or $0.22 per share, in the first quarter of 2024. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Operational Metrics and Orders
Despite the notable revenue growth, CVD Equipment faced a decline in order activity. First-quarter 2025 orders totaled $2.8 million, primarily from the SDC segment, falling short of expectations and down from prior levels. This softness in order intake led to a reduction in backlog from $19.4 million at the end of Dec. 31, 2024, to $13.8 million at the end of March 2025.
However, CVD Equipment disclosed that it secured a $1.2 million semiconductor system order in early April 2025, which is expected to support near-term revenue for its CVD Equipment segment.
CVD Equipment Corporation Price, Consensus and EPS Surprise
CVD Equipment Corporation price-consensus-eps-surprise-chart | CVD Equipment Corporation Quote
Management Commentary
CEO Emmanuel Lakios acknowledged the improved revenue and profitability while cautioning that market conditions remain volatile. He pointed to the recently imposed tariffs as a new challenge, potentially raising the cost of components and materials and contributing to broader economic uncertainty, which could affect future order rates.
To address demand variability, the company implemented cost control measures, including workforce reductions during the quarter. Management emphasized a commitment to balancing growth initiatives with prudent cost management to ensure long-term profitability and positive cash flow.
CFO Richard Catalano noted that while the cash balance decreased from $12.6 million at the end of Dec. 31, 2024, to $10.2 million at the end of March 31, 2025, CVV’s working capital improved to $14.5 million from $13.8 million at the end of Dec. 31, 2024. The cash decline was attributed primarily to costs incurred on contracts in progress, reflected in a $3 million increase in contract assets and a $1.3 million drop in contract liabilities.
Influencing Factors
The quarter’s performance was largely driven by robust execution in the CVD Equipment segment. However, fluctuations in customer orders and the specialized nature of the company’s markets — such as aerospace, high-power electronics and EV battery materials — naturally introduce revenue volatility. CFO Richard Catalano cited inflationary pressures, customer delivery schedules, and geopolitical uncertainties, including tariffs, as key variables that could impact future performance.
CVD Equipment highlighted that cash and cash equivalents declined to $10.2 million from $12.6 million at the end of 2024, mainly due to investments in contracts in progress. Nevertheless, management expressed confidence that current cash reserves and projected operating cash flow will meet working capital needs over the next 12 months.
Other Developments
During the quarter, CVD Equipment implemented a restructuring initiative aimed at aligning operating costs with customer demand. This involved a workforce reduction and a broader review of cost efficiencies. Management continues to monitor market conditions and remains open to further operational adjustments as necessary to preserve financial flexibility.
No acquisitions or divestitures were reported during the quarter.