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SYPR's Q3 Earnings Flat Y/Y, Revenues Down Y/Y on Vehicle Market Slowdown
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Shares of Sypris Solutions, Inc. (SYPR - Free Report) have declined 3.3% since the company reported its earnings for the quarter ended Sept. 28, 2025. This compares to the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has declined 2.4% versus the S&P 500’s 0.1% growth.
Sypris reported third-quarter 2025 net income of 2 cents per share, unchanged from the prior-year quarter.
Revenue of $28.7 million represented a 19.6% decrease from the $35.7 million posted in the same period last year.
However, despite the top-line decline, net income edged slightly higher to $0.5 million, compared with $0.4 million in the third quarter of 2024. The improvement in net earnings was largely driven by a $2.5 million gain from a sale-leaseback transaction.
Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Sypris Technologies, the company’s transportation and energy-related segment, saw its revenues decline sharply, by 41% year over year to $11.5 million for the quarter. This was attributed to a cyclical downturn in the commercial vehicle market, inventory adjustments by customers to align with OEM production schedules, and ongoing tariff-related disruptions.
Additionally, a shift in one of its Mexican operations to a sub-maquiladora services model — where materials are consigned by customers — lowered reported revenue by $1 million compared to the prior year. Gross profit for the segment fell to $0.9 million from $3.7 million, with margins shrinking to 7.5% from 18.8%.
In contrast, Sypris Electronics delivered modest top-line growth. Revenues rose 6% year over year to $17.1 million, supported by a ramp-up in several customer programs. However, gross profit decreased to $1.2 million from $2.3 million a year ago, and margins contracted to 6.9% from 14.3%, primarily due to supply chain constraints and out-of-sequence manufacturing that impaired cost efficiency.
The company reported a total gross profit of $2.1 million for the quarter, down 65.7% from $6 million in the year-ago quarter. Operating loss totaled $1.7 million compared to an operating income of $1.7 million in the same period last year.
Management Commentary
President and CEO Jeffrey T. Gill acknowledged the challenging environment, citing tariff impacts and regulatory uncertainty as key demand suppressors, particularly in the transportation sector. He noted that the inventory drawdown cycle among transportation customers appears to be nearing its end and expressed optimism for a replenishment cycle in 2026. Gill also emphasized that Sypris is focusing on operational excellence and strategic procurement under multi-year customer orders to minimize supply chain disruptions.
He further highlighted steady demand for energy products and potential growth from global LNG infrastructure buildouts and rising electricity needs driven by AI data centers.
Factors Influencing Performance
The third-quarter decline in overall revenue was primarily driven by macroeconomic challenges, notably the imposition of tariffs that disrupted demand and required operational shifts in Mexico. The conversion to a value-added only model for shipments from Mexico effectively reduced the revenue base, even as production activity remained constant. Additionally, the electronics segment's gross margin was pressured by delays and inefficiencies due to limited material availability.
While the electronics business experienced solid order intake — up 65% year to date — execution challenges prevented stronger margin performance. Despite lower profitability, these orders helped lift Sypris Electronics’ backlog by 14% from the end of 2024. Backlog for energy products also rose significantly, by 59% over the same period.
Guidance and Outlook
Looking ahead, the company anticipates continued operational challenges into early 2026, driven by persistent tariff pressures and macroeconomic uncertainties. Management expects a near-term decline in revenue due to further inventory drawdowns and the aforementioned changes in its Mexican operations. However, robust order activity and a strong electronics backlog are expected to partially offset these headwinds. Management remains focused on closely monitoring customer trends and maintaining flexibility in navigating evolving market conditions.
Other Developments
During the third quarter, Sypris completed a sale-leaseback transaction involving its Louisville, KY, manufacturing facility. This move generated net proceeds of approximately $2.9 million and contributed a $2.5 million pre-tax gain, which was recognized in the quarter’s results. The transaction enhanced the company's liquidity profile, which remains a critical focus, given the ongoing losses from operations.
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SYPR's Q3 Earnings Flat Y/Y, Revenues Down Y/Y on Vehicle Market Slowdown
Shares of Sypris Solutions, Inc. (SYPR - Free Report) have declined 3.3% since the company reported its earnings for the quarter ended Sept. 28, 2025. This compares to the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has declined 2.4% versus the S&P 500’s 0.1% growth.
Sypris reported third-quarter 2025 net income of 2 cents per share, unchanged from the prior-year quarter.
Revenue of $28.7 million represented a 19.6% decrease from the $35.7 million posted in the same period last year.
However, despite the top-line decline, net income edged slightly higher to $0.5 million, compared with $0.4 million in the third quarter of 2024. The improvement in net earnings was largely driven by a $2.5 million gain from a sale-leaseback transaction.
Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Sypris Solutions, Inc. price-consensus-eps-surprise-chart | Sypris Solutions, Inc. Quote
Segment Performance and Business Metrics
Sypris Technologies, the company’s transportation and energy-related segment, saw its revenues decline sharply, by 41% year over year to $11.5 million for the quarter. This was attributed to a cyclical downturn in the commercial vehicle market, inventory adjustments by customers to align with OEM production schedules, and ongoing tariff-related disruptions.
Additionally, a shift in one of its Mexican operations to a sub-maquiladora services model — where materials are consigned by customers — lowered reported revenue by $1 million compared to the prior year. Gross profit for the segment fell to $0.9 million from $3.7 million, with margins shrinking to 7.5% from 18.8%.
In contrast, Sypris Electronics delivered modest top-line growth. Revenues rose 6% year over year to $17.1 million, supported by a ramp-up in several customer programs. However, gross profit decreased to $1.2 million from $2.3 million a year ago, and margins contracted to 6.9% from 14.3%, primarily due to supply chain constraints and out-of-sequence manufacturing that impaired cost efficiency.
The company reported a total gross profit of $2.1 million for the quarter, down 65.7% from $6 million in the year-ago quarter. Operating loss totaled $1.7 million compared to an operating income of $1.7 million in the same period last year.
Management Commentary
President and CEO Jeffrey T. Gill acknowledged the challenging environment, citing tariff impacts and regulatory uncertainty as key demand suppressors, particularly in the transportation sector. He noted that the inventory drawdown cycle among transportation customers appears to be nearing its end and expressed optimism for a replenishment cycle in 2026. Gill also emphasized that Sypris is focusing on operational excellence and strategic procurement under multi-year customer orders to minimize supply chain disruptions.
He further highlighted steady demand for energy products and potential growth from global LNG infrastructure buildouts and rising electricity needs driven by AI data centers.
Factors Influencing Performance
The third-quarter decline in overall revenue was primarily driven by macroeconomic challenges, notably the imposition of tariffs that disrupted demand and required operational shifts in Mexico. The conversion to a value-added only model for shipments from Mexico effectively reduced the revenue base, even as production activity remained constant. Additionally, the electronics segment's gross margin was pressured by delays and inefficiencies due to limited material availability.
While the electronics business experienced solid order intake — up 65% year to date — execution challenges prevented stronger margin performance. Despite lower profitability, these orders helped lift Sypris Electronics’ backlog by 14% from the end of 2024. Backlog for energy products also rose significantly, by 59% over the same period.
Guidance and Outlook
Looking ahead, the company anticipates continued operational challenges into early 2026, driven by persistent tariff pressures and macroeconomic uncertainties. Management expects a near-term decline in revenue due to further inventory drawdowns and the aforementioned changes in its Mexican operations. However, robust order activity and a strong electronics backlog are expected to partially offset these headwinds. Management remains focused on closely monitoring customer trends and maintaining flexibility in navigating evolving market conditions.
Other Developments
During the third quarter, Sypris completed a sale-leaseback transaction involving its Louisville, KY, manufacturing facility. This move generated net proceeds of approximately $2.9 million and contributed a $2.5 million pre-tax gain, which was recognized in the quarter’s results. The transaction enhanced the company's liquidity profile, which remains a critical focus, given the ongoing losses from operations.