Enpro Raises 2026 Guidance as Q3 Sales Rise 22.4%

Enpro Inc. (NYSE: NPO) increased its full-year 2026 guidance after third-quarter revenue rose 22.4%, supported by broad strength in Sealing Technologies and stronger semiconductor-related demand in Advanced Surface Technologies. Organic sales grew 16.9%, while higher volume and a more favorable product mix helped lift profitability despite increased spending on growth initiatives.

Third-quarter sales reached $350.8 million, up from $286.6 million a year earlier. Net income increased to $40.3 million, or $1.88 per diluted share, from $21.6 million, or $1.01 per share.

Adjusted EBITDA rose 31.7% to $91.3 million, and the adjusted EBITDA margin expanded 180 basis points to 26.0%. Adjusted diluted earnings per share increased 33.7% to $2.66. Enpro attributed the performance to improved demand for semiconductor products and solutions, strength in aerospace, domestic general industrial and compositional analysis applications, contributions from recent acquisitions, and strategic pricing initiatives. Gross-margin improvement primarily reflected stronger operating leverage in Advanced Surface Technologies and mix benefits from semiconductor solutions and optical coatings.

Semiconductor demand lifts Advanced Surface Technologies

Advanced Surface Technologies reported sales of $136.5 million, up 25.8% from $108.5 million, with the increase entirely reflected in organic growth. Demand improved for semiconductor capital equipment and coatings, while leading-edge precision cleaning solutions also contributed.

Adjusted segment EBITDA climbed 57.3% to $34.3 million, and the segment margin increased to 25.1% from 20.1%. The company said improved operating leverage was the main driver of the earnings increase. Enpro continues to invest in semiconductor capacity expansion in the United States and Asia.

Sealing Technologies generated sales of $214.7 million, a 20.5% increase from $178.2 million. Organic sales grew 11.6%, supported by aerospace, domestic general industrial and compositional analysis applications, along with strategic pricing. European general industrial demand and food and biopharmaceutical demand remained slow during the quarter.

Adjusted segment EBITDA for Sealing Technologies increased 21.8% to $69.9 million, while its margin remained strong at 32.6%, compared with 32.2% a year earlier. On an organic basis, adjusted segment EBITDA rose 13.2%.

Full-year outlook increased

Enpro now expects 2026 revenue of $1.33 billion to $1.34 billion, representing growth of 16% to 17%. Its previous forecast called for growth of 14% to 16%.

The company raised its adjusted EBITDA forecast to $340 million to $345 million from $330 million to $340 million. Adjusted diluted EPS is now expected to be $9.70 to $9.95, compared with the prior range of $9.30 to $9.80. The EPS outlook excludes about $81 million of amortization related to acquired intangible assets.

Enpro also forecasts full-year capital expenditures of approximately $60 million to $65 million, depreciation and amortization of about $109 million to $111 million, net interest expense of roughly $33 million to $34 million, and a normalized tax rate of 25%. Management said about two-thirds of capital spending is being directed toward growth and efficiency projects.

Cash generation supports investment and acquisitions

Free cash flow for the first nine months of 2026 increased 23.2% to $129.2 million from $104.9 million, even as purchases of property, plant and equipment rose to $39.9 million from $29.8 million. Operating cash flow was $172.8 million for the nine-month period, and Enpro paid $20.6 million in dividends.

At September 30, the company held $83.4 million in cash and had $715.2 million available under its revolving credit facility. Debt totaled $526 million, consisting mainly of $450 million of senior notes and $75 million drawn under the revolver, resulting in net debt of $443 million. Enpro said the balance sheet provides capacity to fund organic growth and pursue capability-expanding acquisitions that meet its strategic and financial criteria without using excess leverage.

The guidance remains subject to economic and geopolitical uncertainty, tariffs and other trade restrictions, raw-material cost and availability, foreign-exchange and interest-rate fluctuations, and the timing of expansion projects. Additional risks include the concentration of Advanced Surface Technologies revenue among a limited number of customers, potential acquisition and integration challenges, product-development delays, labor disputes, and contingent liabilities associated with discontinued or divested operations. The outlook excludes the effects of future acquisitions, dispositions, restructuring, subsequent foreign-exchange movements and incremental tariff or trade-tension impacts arising after November 2, 2026.