Preformed Line Products Company (PLPC Quick QuotePLPC - Free Report) delivered solid top-line growth in the third quarter of 2025, supported by strength across its core energy and communications end markets. While reported earnings were pressured by one-time pension termination charges and ongoing tariff-related cost headwinds, the company’s underlying operating performance, balance sheet strength and global diversification continue to make it a stock worth keeping in a long-term portfolio.

Positive Factors That Support Keeping PLPC in Your Portfolio

Strong, Broad-Based Revenue Growth

PLPC posted net sales of $178.1 million in the third quarter of 2025, representing a 21% year-over-year increase, with growth recorded across all geographic segments and product markets. For the first nine months of 2025, net sales rose 16% to $496.2 million, driven primarily by higher volumes in energy and communications products.

The PLP-USA segment benefited from strong domestic demand. At the same time, international operations saw incremental contributions from higher energy sales and the acquisition of JAP Telecom in Brazil, which added $2.3 million in revenues through the third quarter of 2025.

Healthy Core Profitability & Adjusted Earnings Growth

Despite headline earnings being impacted by non-recurring items, PLPC’s operating income improved year over year. Operating income increased to $13.1 million in the third quarter of 2025 from $10.4 million in the same quarter a year earlier, reflecting higher sales volumes and operating leverage.

Importantly, adjusted results paint a clearer picture of the underlying performance. Excluding the pension termination charge, adjusted diluted EPS for the third quarter of 2025 increased 36% year over year to $2.09, highlighting meaningful earnings power once temporary costs are removed.

Strong Balance Sheet & Liquidity Position

PLPC continues to maintain a conservative financial profile. As of Sept. 30, 2025, the company held $72.9 million in cash and equivalents, generated $51.5 million in operating cash flow for the first nine months of 2025, and reported a low bank debt-to-equity ratio of 8.3%.

Management’s disciplined approach to capital allocation allowed the company to reduce its credit facility capacity to $60 million while still maintaining ample liquidity to fund capital expenditure, acquisitions and dividends. The balance sheet strength provides flexibility as PLPC continues to invest in new manufacturing facilities, including projects in Poland and Spain.

Risks & Headwinds Affecting the Outlook

Tariff & Input Cost Pressures

PLPC continues to face margin pressure from tariffs, particularly on steel and aluminum used in its U.S. manufacturing operations. Tariff-related acceleration of LIFO inventory valuation costs totaled $3.8 million in the third quarter of 2025 and $6.2 million for the first nine months of 2025, weighing on the gross margin despite higher sales volumes. Although management has implemented selling price increases to offset these costs, the impacts of pricing actions currently lag cost inflation, creating near-term uncertainty around margin recovery.

One-Time Pension Termination Charge Weighing on GAAP Results

Reported earnings were significantly impacted by a non-cash pre-tax pension termination charge of $11.7 million in the third quarter of 2025. This charge reduced GAAP diluted EPS to 53 cents from $1.54 in the prior-year period, which may weigh on near-term investor sentiment despite being non-recurring in nature.

Elevated Capital Spending & Execution Risks

PLPC is currently in an elevated capital expenditure cycle, primarily related to the construction of a manufacturing facility in Poland and expansion efforts in Europe. While these investments are strategically important, they also increase near-term cash outflows and execution risks, particularly if global economic conditions weaken or demand softens in key markets.

Bottom Line

Preformed Line Products remains fundamentally sound, with strong revenue growth, improving adjusted profitability and a solid balance sheet. However, tariff-related cost pressures, recent earnings volatility, driven by one-time charges, and elevated capital spending justify a cautious stance in the near term.

While tariffs, temporary earnings noise and elevated capex could create near-term volatility, the company’s underlying momentum and financial flexibility support keeping the stock in your portfolio—particularly for investors focused on long-term positioning in energy and communications infrastructure demand.