Argan 2026 Q3 Earnings Record Net Income Drives Strong Performance

Argan (AGX) reported mixed third-quarter fiscal 2026 results, with earnings exceeding expectations while revenue fell short. The company’s EPS rose 7.2% year-over-year, and net income hit a 20-year high. CEO David Watson highlighted a $3 billion backlog and improved gross margins, signaling confidence in future growth despite near-term revenue challenges.

Revenue

Argan’s total revenue for 2026 Q3 declined 2.3% to $251.15 million, primarily due to project timing and mix shifts. The Power Services segment remained the largest contributor, generating $195.51 million, while Industrial Services added $49.36 million. Telecom Services accounted for $6.29 million, and the “Other” category reported no revenue. The sequential revenue increase of 6% from Q2 underscores ongoing project execution momentum despite the year-over-year decline.

Earnings/Net Income

Argan’s EPS surged to $2.22 in 2026 Q3, a 7.2% increase from $2.07 in the prior-year period. Net income reached $30.74 million, marking a 9.7% year-over-year rise and a new record for the quarter. The company’s profitability was bolstered by a 18.7% gross margin, driven by efficient project execution and cost management. This earnings growth reflects strong operational leverage despite the revenue shortfall.

Price Action

The stock price of Argan has edged up 2.19% during the latest trading day, has dropped 6.37% during the most recent full trading week, and has jumped 14.81% month-to-date.

Post-Earnings Price Action Review

Following the earnings release, Argan’s shares plunged over 10% amid the revenue miss, despite beating EPS estimates by $0.37. The decline reflected investor concerns about near-term revenue visibility, though the record $3 billion backlog and improved margins provided some optimism. Month-to-date gains of 14.81% suggest underlying demand for the company’s services in the power infrastructure sector. Analysts remain cautiously bullish, citing the company’s strong cash reserves and no-debt balance sheet as tailwinds.

CEO Commentary

David Watson, CEO, highlighted Argan’s Q3 2026 performance, noting a record $3 billion backlog driven by demand for thermal and renewable power projects amid grid strain from electrification and aging infrastructure. He emphasized gross margin improvement to 18.7% and strong profitability, attributing growth to “steady industry demand and disciplined project execution.”

Guidance

Argan expects to maintain a project capacity of 10–12 jobs for the foreseeable future, with management expressing confidence in expanding the backlog as projects progress. While the company remains conservative on margin guidance, year-to-date gross margins of 18.8% suggest room for upside.

Additional News

Argan announced a third consecutive annual dividend increase, raising the quarterly payout to $0.50 per share. The company also secured two major gas-fired power projects in Texas—the 1.4 GW CPV Basin Ranch Energy Center and an 860 MW facility—boosting its backlog to $3 billion. CFO Joshua Baugher highlighted $46.9 million in gross profit and $30.7 million in net income, underscoring the firm’s financial resilience. With no debt and $726.8 million in cash, Argan remains well-positioned to capitalize on surging demand in power infrastructure.