Twin Disc 2025 Q3 Earnings Misses Targets with Net Income Plummeting 136.5%

Twin Disc (TWIN) reported its fiscal 2025 Q3 earnings on May 07th, 2025. Twin Disc's third-quarter results fell short of expectations, with the company swinging to a net loss from a profit in the previous year. The guidance remained in line with the company's long-term strategic focus, emphasizing operational efficiencies and growth in hybrid and electric marine solutions. Despite global challenges, Twin Disc remains committed to its strategic priorities, supported by a flexible supply chain and strong order activity.

Revenue

Twin Disc's total revenue increased by 9.5% to $81.24 million in 2025 Q3, compared to $74.16 million in 2024 Q3. The revenue growth was driven by various segments: Industrial products generated $9.73 million, land-based transmissions brought in $17.78 million, marine and propulsion systems contributed $49.30 million, while other segments accounted for $4.43 million.

Earnings/Net Income

Twin Disc experienced a significant decline, moving from a profit of $0.28 per share in 2024 Q3 to a loss of $0.11 per share in 2025 Q3, marking a 139.3% negative change. The net loss reached $1.42 million, a 136.5% deterioration from the previous year's net income of $3.90 million. The EPS performance was notably unfavorable.

Price Action

The stock price of Twin Disc climbed 5.39% during the latest trading day, edged down 1.36% over the most recent full trading week, and gained 6.78% month-to-date.

Post Earnings Price Action Review

The strategy of purchasing Twin Disc shares following a revenue increase and holding for 30 days yielded moderate returns over the past five years, exhibiting some volatility. From May 7, 2020, to May 7, 2025, the portfolio achieved an annualized return of 9.16%, with 66.88% of months showing positive returns. Despite a maximum drawdown of 23.55% from January 2022 to September 2022, the recovery time of 18 months indicated resilience. The cumulative return over five years was substantial, surpassing Twin Disc's revenue growth, capturing the stock's growth potential and volatility. Although the strategy fell short of the benchmark's annual returns of 13.81%, it provided additional boosts during growth periods. Overall, buying Twin Disc shares after a revenue raise and holding for 30 days delivered decent returns, balancing growth and risk with consistency and recovery from downturns.

CEO Commentary

"Our third quarter results reflect another solid performance, with sequential margin improvement and strong momentum exiting the quarter," commented John H. Batten, President and Chief Executive Officer of Twin Disc. He highlighted the strength across core marine propulsion markets, particularly in North America and Europe, and robust order activity for Veth, driven by demand in luxury yacht and riverboat vessels. Despite global macroeconomic uncertainty, Batten emphasized the company's diversified geographic footprint and mission-critical portfolio, which provide resiliency. He noted continued focus on executing long-term strategies, integrating acquisitions, driving operational efficiencies, and positioning Twin Disc as a leader in hybrid and electric marine solutions.

Guidance

"We remain focused on executing our long-term strategy, including integrating recent acquisitions, driving operational efficiencies, and positioning Twin Disc as a leader in hybrid and electric marine solutions," stated John H. Batten. He conveyed confidence in the company's ability to adapt to changing trade dynamics, supported by a flexible global supply chain and manufacturing network. The CFO, Jeffrey S. Knutson, indicated that the company is well-positioned to support long-term growth and navigate ongoing macroeconomic uncertainty, aiming for improved margins and cash generation as it advances strategic priorities.

Additional News

On February 18, 2025, Twin Disc announced the successful acquisition of Kobelt Manufacturing Co. Ltd for $16.5 million, enhancing its product portfolio and market position. Additionally, on February 5, 2025, the company declared a regular quarterly cash dividend of $0.04 per share, payable on March 3, 2025, underscoring its commitment to shareholder returns. In another announcement on April 22, 2025, Twin Disc revealed plans for a webcast and conference call to discuss its fiscal 2025 third-quarter results, emphasizing transparency and engagement with the investment community.