Atkore International ((ATKR)) has held its Q1 earnings call. Read on for the main highlights of the call.
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During Atkore International’s recent earnings call, the company conveyed a sentiment of facing significant challenges in the current market landscape. Several factors, such as declines in organic volume, pricing pressures, and increased competition, have negatively impacted performance. Despite these hurdles, Atkore remains committed to shareholder returns, sustainability, and operational improvements. The overall tone of the call was one of addressing challenges and adjusting expectations for the fiscal year.
Shareholder Returns
Atkore demonstrated its commitment to returning value to shareholders by repurchasing $50 million worth of shares in the first quarter. This was in addition to the regular quarterly dividend payments, underscoring the company’s focus on rewarding its investors even during challenging times.
Sustainability Initiatives
The company made significant strides in its sustainability efforts by publishing the fiscal year 2024 Sustainability Report. This report highlighted ongoing initiatives and achievements towards their 2025 goals, including the release of additional environmental product declarations for key products, which now cover about half of global sales.
Operational Improvements
Atkore reported operational enhancements, particularly in their Hobart, Indiana facility, and the S&I team. These improvements contributed to sequential margin growth in the S&I segment, showcasing the company’s ongoing efforts to optimize its operations.
Decline in Organic Volume
The first quarter saw a 5% decline in organic volume compared to the previous year’s strong performance. This was attributed to tougher market conditions, which have posed significant challenges for the company.
Pricing Pressures
Atkore faced a 12% decline in average selling prices during the quarter, with PVC conduit and steel conduit products particularly affected. This pricing pressure has been a notable challenge, impacting overall revenues.
Increased Competition and Imports
The market environment was further strained by a rise in imported PVC and steel conduit volumes. The increased imports, especially from countries with lax quantity limitations, have intensified competition, impacting Atkore’s market position.
Challenges in Utility Scale Solar Market
Despite operational improvements, the utility scale solar market faced downstream constraints, affecting volume growth. This sector continues to be an area of challenge for Atkore.
Forward-Looking Guidance
Atkore reported first-quarter net sales of $662 million and an adjusted EBITDA of $99 million, aligning with expectations. However, due to challenging conditions, the company revised its full-year 2025 adjusted EBITDA guidance to approximately $400 million. This reflects the anticipated impact of increased imports and competitive pressures. Nevertheless, Atkore remains focused on growth initiatives and expects low to mid-single-digit volume growth for the year.
In conclusion, Atkore International’s earnings call highlighted several challenges faced by the company, including pricing pressures and increased competition. Despite these hurdles, the company is committed to shareholder returns, sustainability, and operational improvements. With adjusted guidance reflecting market realities, Atkore aims to navigate these challenges while focusing on growth and operational excellence.
