Albany International Adjusts 2024 Forecast Amid Aerospace Delays

Albany International Corp. (NYSE: AIN) recently announced a preliminary update to its full-year outlook, reflecting revised revenue and profitability expectations for the aerospace business within its Engineered Composites (AEC) segment. The company attributed these changes to increased cost assumptions and suspended production at a key customer due to union negotiations.

The delays have resulted in an approximate $24 million negative Estimate-at-Completion (EAC) adjustment in the third quarter of 2024, with changes in other forecast assumptions projected to lower second-half pre-tax earnings by an additional $8 million. Despite these adjustments, Albany International expects AEC to maintain high-teen EBITDA margins that are well above peer averages.


President and CEO, Gunnar Kleveland, stated that the company continues to see momentum in both Machine Clothing and Engineered Composites segments. The Heimbach integration remains on track, and Albany's differentiated innovation is translating into robust demand across both segments. However, growth in aerospace programs is resulting in more complex projects with steeper manufacturing learning curves and labor ramps.

The company updated its guidance for the full year of 2024 as follows:

* Total company revenue between $1.22 billion and $1.26 billion
* Effective income tax rate of approximately 27%
* Capital expenditures in the range of $90 million to $95 million
* Adjusted diluted earnings per share between $2.90 and $3.40, with the second half EPS weighted towards the fourth quarter
* Total company Adjusted EBITDA between $230 million and $250 million
* Machine Clothing revenue between $740 million and $760 million
* Machine Clothing Adjusted EBITDA between $235 million and $245 million
* Albany Engineered Composites revenue between $480 million and $500 million
* Albany Engineered Composites Adjusted EBITDA between $65 million and $75 million


These delays may impact Albany International's long-term contracts and customer relationships, as they could lead to increased costs and potential delays in project completion. However, the company is implementing strategic measures to mitigate the financial impact, such as updating cost assumptions and maintaining high-teen EBITDA margins. These adjustments may affect Albany International's competitive position in the aerospace industry, as competitors may face similar challenges or capitalize on the situation. The potential implications of these delays on Albany International's stock price and investor sentiment remain to be seen, as market reactions can be influenced by various factors.