What factors could drive NX's EPS surprise in Q2 2025?

**Quanex Building Products Corporation (NX) is unlikely to experience an EPS surprise in Q2 2025** for several reasons:

1. **Acquisition Impact**: The company's Q1 2025 earnings were influenced by the acquisition of Tyman, which closed in August 2024. While Tyman's contribution might have boosted Q2 2025 revenues, the integration and related costs could affect net income, potentially flattening the EPS surprise.
2. **Organic Demand Challenges**: Excluding Tyman's contribution, Quanex faced a 2.3% decline in organic revenue due to lower demand. This trend suggests that NX might not exceed expectations in Q2 2025 if the underlying business continues to face challenges from sluggish demand across core markets.
3. **Housing Sector Slowdown**: The housing sector's slowdown, high interest rates, and inflationary pressures have restricted new home construction and remodeling activities. These factors are likely to persist into Q2 2025, continuing to impact NX's revenue and potentially limiting the company's ability to exceed EPS expectations.
4. **Earnings Trends**: NX's earnings have been volatile, with a significant decline of 35.8% year-over-year in Q1 2025 despite strong revenue growth. This volatility indicates that unexpected events or circumstances could lead to variations in earnings that might not be consistently positive.

In conclusion, while NX has a history of exceeding earnings expectations, as indicated by the company's average surprise of 23.5% over the trailing four quarters, the likelihood of an EPS surprise in Q2 2025 is low due to the integration costs related to Tyman, ongoing challenges in organic demand, and the continued impact of the housing sector slowdown.