EML Upgraded to Outperform on Backlog Growth, Aerospace Push
Eastern's rating upgrade reflects growing backlog, aerospace and defense expansion, improving demand outlook and stronger cash generation abilities.

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and North America. The company offers ...
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$0.44 per share
Est. EPS $0.89 · Revenue $78.55M · 1 analysts
Est. EPS $2.56 · Revenue $293.48M · 1 analysts
Est. EPS $0.50 · Revenue $73.49M · 1 analysts
$0.44 per share
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). | $249.0M | -8.7% | +3.6% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $5.1M | +160.0% | +782.5% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +22.6% | -8.2% | +4.8% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | +4.1% | -45.1% | +40.6% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | +2.1% | +165.7% | +751.9% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $4.9M | -54.8% | +204.1% |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +2.0% | -50.5% | +193.5% |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 43.2% | -13.4% | +10.3% |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 3.59x | +39.3% | -20.5% |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $216.7M | -7.9% | +12.9% |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | 0.84 vs 1.98 | -57.6% | 0.94 vs 0.67 | +40.3% |
| Revenue Surprise | $249.0M vs $274.3M | -9.2% | $61.8M vs $73.7M | -16.1% |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Jun 16, 2026 | EVERETS JOHN | director | Common Shares | A | 1,310 | $21.40 |
| Jun 16, 2026 | DiSanto Frederick D. | director | Common Stock, par value $0.01 per share | A | 1,000 | $21.25 |
| Jun 16, 2026 | Galbato Chan | director | Common Shares | A | 940 | $21.40 |
| Jun 16, 2026 | MITAROTONDA JAMES A | director, 10 percent owner: | Common Shares | A | 1,679 | $21.40 |
| Jun 16, 2026 | Scott Peggy | director | Common Shares | A | 1,176 | $21.40 |
Operator: Good day, everyone. Welcome to The Eastern Company Second Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Vice President and Chief Financial Officer, Nicholas Vlahos. The floor is yours. Nicholas Vlahos: Good morning, everyone, and thank you for joining us for a review of The Eastern Company's results for the Second Quarter of 2026. With me on the call is Ryan Schroeder, Chief Executive Officer. The company issued its press release yesterday after market close. If anyone has not yet seen the release, please visit the Investor Information section of the company's website, www.easterncompany.com, where you will find the release under financial news. Please note that some of the information you'll hear during today's call will consist of forward-looking statements about the company's future financial performance and business prospects including, without limitation, statements regarding revenue, gross margins, operating expenses, other income and expenses, taxes and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected. We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances that occur after the call. For more information regarding those risks and uncertainties please refer to risk factors discussed in our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q. In addition, during today's call, we will discuss non-GAAP financial measures that we believe are useful as supplemental measures of Eastern's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. A reconciliation of each non-GAAP measure discussed today to the most directly comparable GAAP measure can be found in the earnings press release. With that introduction, I will turn the call over to Ryan. Ryan Schroeder: Thank you, Nick, and good morning, everyone. Welcome to The Eastern Company's Second Quarter 2026 Earnings Conference Call. Following my prepared remarks, Nick will walk through the financial results in greater detail. We will then open the call for your questions. I want to begin with our view of the quarter and the direction of the business as we move into the second half of 2026. The quarter included several moving pieces, but the sequential improvement in our results and the strength of our order book gives us increasing confidence of the underlying trajectory of the business. Our bottom line results included a onetime bargain purchase gain of approximately $6.5 million associated with the acquisition of Sungear and Crown Precision. The transactions became effective on June 1, so the quarter includes one month of contribution from those businesses. Net sales from continuing operations …
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
Ryan Schroeder | President, Chief Executive Officer & Director | USD 516,750 | Male | 1976 | Active |
Nicholas Vlahos | Vice President & Chief Financial Officer | USD 398,817 | Male | 1982 | Active |
Ernie Hawkins | Executive Officer | — | Male | — | Active |
Dan W. McGrew | President & Chief Executive Officer of Velvac Holdings, Inc. | — | Male | 1963 | Active |
Zachary Gorny | President of Eberhard Manufacturing | — | Male | — | Active |
Marianne Barr | Treasurer & Secretary | — | Female | — | Active |
Emilio Ruffolo | President of Big 3 Precision Products | — | Male | — | Active |
Eastern's rating upgrade reflects growing backlog, aerospace and defense expansion, improving demand outlook and stronger cash generation abilities.

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EML's Q2 earnings per share fall year over year due to lower shipments, softer margins and tariff costs, while a 45% surge in backlog points to improving business momentum.
