NPK Stock Down 8% Despite Q1 Earnings Rise Y/Y on Higher Defense Sales

Shares of National Presto Industries, Inc. NPK have declined 8.2% since the company reported its earnings for the quarter ended March 30, 2025. This compares to the S&P 500 index’s 0.3% decline over the same time frame. Over the past month, the stock has decreased 4.8% against the S&P 500’s 2.8% growth, suggesting a notable underperformance relative to the broader market.National Presto reported first-quarter 2025 earnings per share of $1.07 compared to 92 cents a year ago. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Net sales reached $103.6 million, marking a 35.2% increase from $76.7 million in the prior-year period. Net earnings rose to $7.6 million, up 15.9% from $6.6 million in the first quarter of 2024.National Presto Industries, Inc. Price, Consensus and EPS Surprise National Presto Industries, Inc. price-consensus-eps-surprise-chart | National Presto Industries, Inc. QuoteSegment Performance HighlightsAll three of the company’s segments experienced higher sales during the quarter, but the Defense segment was the standout performer. Defense sales surged $25.9 million, or 47.1%, primarily driven by increased backlog shipments. Operating earnings in the Defense segment also climbed significantly — by $4.9 million or 58.6% — reflecting the sales boost.Meanwhile, sales in the Housewares/Small Appliance and Safety segments showed only nominal gains. However, the Small Appliance business posted an operating loss, attributed to a less favorable product mix and elevated material costs. The Safety segment also recorded a loss, which management had previously anticipated.Management CommentaryPresident Maryjo Cohen emphasized that the growth in Defense was the central driver of overall company performance, citing “increased shipments from its backlog” as the primary catalyst. However, she acknowledged challenges in the consumer-facing segments, particularly in the Housewares business. A key headwind was the implementation of “Trump tariffs” on certain imported goods, which became effective for shipments deemed to have originated from the Orient after Jan. 31. These tariffs, now set at 145%, are recorded as period costs and significantly impacted earnings. In response, the company has paused new product announcements and purchasing activity, a notable shift given its historical emphasis on innovation in the Housewares segment.Factors Affecting Financial ResultsThe company faced a complex cost environment. Elevated material costs and punitive tariff rates weighed heavily on margins, particularly in the Housewares/Small Appliance segment. The tariff-related expenses were not capitalized but rather expensed immediately, further pressuring the bottom line. Additionally, despite improved sales, the Safety segment continued to be a drag on overall profitability.A further dampener on earnings was muted portfolio income. According to the release, the company’s portfolio earnings were “nominal” due to the capital allocation needs of the Defense business. Inventory investments were ramped up to support recently expanded Defense contract awards, limiting the availability of funds for interest or dividend-yielding instruments.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report National Presto Industries, Inc. (NPK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks