ATS (NYSE:ATS) Posts Quarterly Earnings Results, Misses Expectations By $0.03 EPS

ATS (NYSE:ATS) issued its earnings results on Wednesday. The company reported $0.19 EPS for the quarter, missing the consensus estimate of $0.22 by ($0.03), Zacks reports. ATS had a return on equity of 8.96% and a net margin of 1.60%. During the same quarter in the previous year, the business earned $0.45 EPS. The business’s revenue was down 8.6% on a year-over-year basis.

Here are the key takeaways from ATS’s conference call:

• Bookings rose 12.7% year over year to CAD 827 million, and backlog reached approximately CAD 2 billion. Life sciences backlog hit a record CAD 1.2 billion, supported by radiopharma and medical-device orders, though management said longer project timelines mean the bookings will take time to convert into revenue.
• ATS no longer expects to achieve its fiscal 2027 goals for modest revenue growth and margin expansion, citing delayed orders, lower volumes and unfavorable mix. It forecast Q3 revenue of CAD 640 million to CAD 680 million and expects near-term margin pressure.
• The company is targeting CAD 65 million to CAD 75 million in annualized net savings from its Fixed Cost Transformation Program, with benefits expected to build as implementation continues over the next 15 months. Actions announced so far include facility closures and a workforce reduction of 300 to 400, while ATS says it is adding capacity in growth areas such as radiopharma.
• Section 338 tariffs delayed packaging-equipment orders from Canadian facilities to U.S. customers, but U.S. modifications announced in late October removed the tariffs from nearly all affected products. Management sees potential for orders to resume but did not quantify the timing or value.
• Net debt to adjusted EBITDA rose to 3.1 times, above ATS’s target range of two to three times, reflecting lower trailing EBITDA and CAD 61 million of share repurchases. The company expects to remain moderately above its target range for the rest of fiscal 2027, absent acquisitions or portfolio actions.

ATS Price Performance

ATS stock traded down $1.70 during mid-day trading on Wednesday, hitting $17.26. The stock had a trading volume of 259,870 shares, compared to its average volume of 200,246. The company has a current ratio of 1.63, a quick ratio of 1.33 and a debt-to-equity ratio of 0.75. ATS has a 52 week low of $17.15 and a 52 week high of $35.82. The firm has a market capitalization of $1.66 billion, a P/E ratio of 50.76 and a beta of 1.15. The firm has a fifty day simple moving average of $18.79 and a 200 day simple moving average of $26.50.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on the stock. Zacks Research raised shares of ATS from a “strong sell” rating to a “hold” rating in a research report on Monday, October 19th. Weiss Ratings lowered ATS from a “hold (c-)” rating to a “sell (d+)” rating in a report on Friday, September 25th. Wall Street Zen downgraded ATS from a “buy” rating to a “hold” rating in a research note on Sunday, July 12th. Finally, TD Securities downgraded shares of ATS from a “buy” rating to a “hold” rating in a research note on Monday, August 10th. Three investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $42.50.

About ATS

ATS Corporation is a Canadian automation solutions provider headquartered in Cambridge, Ontario. The company designs, builds and services automated manufacturing systems, production equipment and related technologies for manufacturers in a range of industries.

Its offerings include custom automation systems, assembly and test equipment, material-handling solutions, packaging systems, precision components and aftermarket services. ATS also provides automation software, controls, engineering, technical support and lifecycle services intended to improve production efficiency, quality and flexibility.

The company serves customers in sectors including life sciences, transportation, energy, consumer products and industrial manufacturing.