Gates Industrial (NYSE:GTES) Posts Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Gates Industrial (NYSE:GTES) issued its earnings results on Friday. The company reported $0.47 earnings per share for the quarter, topping the consensus estimate of $0.44 by $0.03, FiscalAI reports. Gates Industrial had a return on equity of 10.11% and a net margin of 10.37%. The business had revenue of $903.60 million for the quarter, compared to analyst estimates of $904.77 million. During the same quarter last year, the company earned $0.39 EPS. The business’s quarterly revenue was up 5.6% on a year-over-year basis.

Here are the key takeaways from Gates Industrial’s conference call:

• Gates reported solid third-quarter execution, with core sales up 5.5%, adjusted EBITDA up 10%, and record adjusted EBITDA margin of 23.8% and adjusted EPS of $0.47. Growth was led by industrial markets, commercial on-highway, and personal mobility.
• Management raised full-year adjusted EBITDA guidance to $809 million–$823 million and adjusted EPS guidance to $1.66–$1.72, while maintaining its 3.5% midpoint for core sales growth. Fourth-quarter core revenue growth is expected to accelerate to approximately 6.5%.
• Industrial demand continued to broaden, with North American industrial OEM sales up more than 20%, industrial aftermarket sales accelerating, and global book-to-bill remaining above 1.0. Management said the improving cycle provides a favorable setup for 2027, including a potential recovery in agriculture.
• Strategic growth areas are gaining traction: personal mobility sales rose approximately 35% and data-center revenue increased about 2.5 times year over year. Gates is adding products, commercial resources, and capacity in data-center applications, while targeting sustained 20%–30% growth in personal mobility over the next several years.
• Fourth-quarter margins are expected to face normal seasonal pressure, less favorable price-cost timing, and roughly a 100-basis-point year-over-year headwind from higher variable compensation. Fluid Power margins are also being weighed down by investments in data centers and broader product-development and commercial initiatives.

Gates Industrial Stock Down 10.0%

Shares of GTES stock traded down $2.62 on Friday, hitting $23.63. The stock had a trading volume of 1,741,211 shares, compared to its average volume of 2,145,866. The firm has a market capitalization of $5.98 billion, a price-to-earnings ratio of 16.72 and a beta of 1.28. Gates Industrial has a 52-week low of $20.88 and a 52-week high of $30.34. The company has a debt-to-equity ratio of 0.58, a quick ratio of 2.36 and a current ratio of 3.24. The stock’s 50 day moving average is $26.10 and its 200-day moving average is $25.75.

Analyst Upgrades and Downgrades

A number of analysts recently issued reports on the company. Royal Bank Of Canada upped their target price on Gates Industrial from $33.00 to $34.00 and gave the company an “outperform” rating in a research report on Monday, August 3rd. Wolfe Research reaffirmed an “outperform” rating and issued a $33.00 target price on shares of Gates Industrial in a report on Thursday, July 9th. Citigroup boosted their target price on shares of Gates Industrial from $33.00 to $35.00 and gave the stock a “buy” rating in a research report on Monday, August 3rd. Weiss Ratings downgraded Gates Industrial from a “buy (b)” rating to a “buy (b-)” rating in a research note on Friday, October 23rd. Finally, KeyCorp increased their price objective on Gates Industrial from $31.00 to $34.00 and gave the company an “overweight” rating in a research note on Monday, August 3rd. Nine investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat, Gates Industrial presently has a consensus rating of “Moderate Buy” and an average target price of $32.45.

Insider Buying and Selling at Gates Industrial

In other news, Director Peifang Zhang sold 6,000 shares of the company’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $29.56, for a total value of $177,360.00. Following the sale, the director owned 44,044 shares in the company, valued at approximately $1,301,940.64. This represents a 11.99% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Insiders own 2.80% of the company’s stock.

About Gates Industrial

Gates Industrial Corporation plc (NYSE: GTES) is a manufacturer of engineered power transmission and fluid power products. The company develops solutions designed to transfer power, control motion, and manage the flow of fluids in industrial and mobile applications.

Its product portfolio includes synchronous and V-belts, belt drives, hoses, hydraulic assemblies, couplings, tensioners, pulleys, and related components. Gates serves original equipment manufacturers, distributors, and aftermarket customers across industries such as automotive, agriculture, construction, energy, manufacturing, and general industrial equipment.

The company traces its roots to the Gates Rubber Company, founded in 1911 in Denver, Colorado.