Albany International Corporation (AIN) shares took a hit in premarket trading on Thursday after the company revised its full-year outlook downwards. The revised outlook reflects a dimmer picture for the company’s aerospace business within its Engineered Composites (AEC) segment. The company attributes the revised outlook to slower revenue and profitability expectations. This shift is attributed to updated labor and material cost assumptions, coupled with a production suspension at a key customer. This combination is expected to result in an estimated negative adjustment of around $24 million for the third quarter of 2024. Additionally, adjustments to other forecast assumptions could further reduce second-half pre-tax earnings by an additional $8 million.
The company has adjusted its revenue outlook for FY24 to a range of $1.22 billion to $1.26 billion, a reduction from the previously projected range of $1.26 billion to $1.33 billion. This revised outlook falls short of the consensus estimate of $1.29 billion. Albany International also adjusted its adjusted EPS outlook to a range of $2.90 to $3.40, down from the previous range of $3.55 to $4.05 and below the consensus estimate of $3.74.
Despite these adjustments, President and CEO Gunnar Kleveland emphasized the company’s continued momentum in both its Machine Clothing and Engineered Composites segments. The integration of Heimbach remains on track, and the company’s innovative approach continues to drive strong demand across both segments. Kleveland acknowledges the increasing complexity of aerospace projects, leading to steeper manufacturing learning curves and labor ramps. However, he maintains that the AEC segment is poised to retain high-teen EBITDA margins, significantly exceeding industry averages.
As a result of the revised outlook, AIN shares are down 3.16% at $84.17 in premarket trading. Investors will be closely watching how the company navigates these challenges and the impact on its future performance.
