Chart Industries' Q1 2025: Unraveling Contradictions on Tariff Management, Backlog Conversion, and LNG Activity
Earnings DecryptTuesday, May 6, 2025 7:34 pm ET
2min read
Tariff mitigation and exposure, backlog visibility and conversion, tariff mitigation and impact assessment, backlog and order progression, and LNG project activity and orders timing are the key contradictions discussed in Chart Industries' latest 2025Q1 earnings call.
Strong Financial Performance:
- reported orders of $1.32 billion for the first quarter of 2025, a 17.3% increase, and sales of $1 billion with a 6.6% organic growth.
- The growth was driven by the addition of the Woodside Louisiana LNG Phase 2 project and increased orders in nuclear, marine, and space exploration.
Earnings and Margin Improvement:
- Adjusted reported diluted earnings per share was $0.99, and adjusted was $1.86, marking an increase of 38.8%.
- This improvement was due to operational efficiencies, leverage of SG&A, and a 190-basis point expansion in adjusted operating income margin.
Specialty Products Growth:
- Specialty Products orders increased by 24.6% to $487.7 million, and sales grew by 16.7% to $276.1 million.
- The growth was driven by backlog conversion in hydrogen, water treatment, and power generation, along with improved efficiencies in specialty shops.
Mitigation of Tariff Impacts:
- The company estimated the annual gross impact of tariffs to be approximately $50 million, with $34 million remaining for the rest of 2025.
- Mitigation efforts included leveraging regional and global sourcing, flexible manufacturing, and exemptions, which are expected to manage the impact within the guidance range.
Strong Financial Performance:
- reported orders of $1.32 billion for the first quarter of 2025, a 17.3% increase, and sales of $1 billion with a 6.6% organic growth.
- The growth was driven by the addition of the Woodside Louisiana LNG Phase 2 project and increased orders in nuclear, marine, and space exploration.
Earnings and Margin Improvement:
- Adjusted reported diluted earnings per share was $0.99, and adjusted was $1.86, marking an increase of 38.8%.
- This improvement was due to operational efficiencies, leverage of SG&A, and a 190-basis point expansion in adjusted operating income margin.
Specialty Products Growth:
- Specialty Products orders increased by 24.6% to $487.7 million, and sales grew by 16.7% to $276.1 million.
- The growth was driven by backlog conversion in hydrogen, water treatment, and power generation, along with improved efficiencies in specialty shops.
Mitigation of Tariff Impacts:
- The company estimated the annual gross impact of tariffs to be approximately $50 million, with $34 million remaining for the rest of 2025.
- Mitigation efforts included leveraging regional and global sourcing, flexible manufacturing, and exemptions, which are expected to manage the impact within the guidance range.
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