Canada's Hammond Power Q1 sales jump 31.5%, beat estimates

Overview

• Canada transformer maker's Q1 sales rose 31.5% yr/yr, beating analyst expectations

• Adjusted EPS for Q1 climbed 29.7% yr/yr

• Company backlog nearly doubled yr/yr, driven by large data centre projects

Outlook

• Company expects continued demand from data centre and custom product markets in 2026

• Hammond Power Solutions says backlog growth provides visibility for remaining 2026 quarters

• Company sees ongoing capacity expansion improving lead times and supporting future growth

Result Drivers

• CUSTOM PRODUCT DEMAND - Co said record sales were driven by strong shipments of custom products, particularly for data centre applications, especially in the U.S. and Mexico

• NEW MEXICO PLANT - Shipments from the company's new factory in Mexico contributed to increased sales volumes in the quarter

• TARIFF PRESSURE - Gross margin declined from the prior year due to direct and indirect tariff-related input cost increases

Company press release: ID:nGNX9SzJz4

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the heavy electrical equipment peer group is "buy"

• Wall Street's median 12-month price target for Hammond Power Solutions Inc is C$245.00, about 16.7% below its May 4 closing price of C$293.99

• The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 23 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.