Perma-Pipe 2026 Q2 Earnings Net Income Hits 9-Year High Despite EPS Decline

Perma-Pipe reported mixed second-quarter earnings for fiscal 2026, with strong revenue growth but a sharp decline in earnings per share. The company recorded $47.90 million in revenue, up 27.7% year-over-year. However, EPS fell by 73.2% to $0.11, and net income dropped by 70.5% to $1.26 million. Despite the earnings drop, the company noted a record-high net income for the quarter, the highest in nine years.

Revenue
Perma-Pipe's total revenue surged by 27.7% to $47.90 million in Q2 2026 compared to $37.51 million in Q2 2025, driven by strong performance in the Middle East and North America. The revenue breakdown included $3.45 million from the Products segment and $44.45 million from the Specialty Piping Systems and Coating segment. Additionally, the company recognized $12.96 million under the input method and $31.49 million under the output method.

Earnings/Net Income
Perma-Pipe’s earnings per share fell dramatically by 73.2% to $0.11 in Q2 2026 from $0.41 in Q2 2025, while net income declined by 70.5% to $1.26 million from $4.28 million a year earlier. Despite the drop, the company achieved a record-high net income for the quarter, marking its highest Q2 earnings in nine years. However, the significant EPS decline suggests operational challenges.

Price Action
The stock price of Perma-Pipe has seen a sharp decline in recent trading periods. It edged down 2.13% during the latest trading day, plummeted 17.52% during the most recent full trading week, and dropped 3.71% month-to-date, reflecting investor concern despite strong revenue performance.

Post-Earnings Price Action Review
Perma-Pipe President and CEO Saleh Sagr highlighted robust first-half results driven by increased sales volumes in the Middle East and North America, with net sales of $47.9 million for the quarter and $94.6 million year-to-date. He noted growth in gross profit and a $157.8 million backlog as of July 31, 2025, reflecting strong order intake in both regions. Despite higher general and administrative expenses, including a $2.1 million one-time charge for executive compensation, the CEO emphasized strategic investments in a new Qatar facility backed by over $5 million in new awards. He expressed confidence in driving profitable growth and enhancing the company’s competitive position.

CEO Commentary
Saleh Sagr emphasized the company’s strategic investments and strong order book as key drivers for future growth. He acknowledged the challenges in the quarter, including elevated expenses, but underscored the importance of these investments in securing long-term success. The CEO also highlighted the company’s focus on expanding its presence in the Middle East, particularly through the new Qatar facility, as a key component of its growth strategy.

Guidance
Perma-Pipe has not provided specific financial guidance for future periods but noted continued momentum in core markets and the potential for improved operating leverage. The CEO stated that the review of strategic options is underway but did not quantify expected outcomes or timeframes for the process.

Additional News
Among the notable news items within the three weeks preceding Perma-Pipe’s earnings report was the announcement of new investments in renewable energy infrastructure in the Middle East, which could impact the demand for the company’s products. Additionally, there was a reported shift in global supply chain dynamics, with increased focus on regional manufacturing, which may affect Perma-Pipe’s competitive positioning. Lastly, there was a surge in demand for sustainable construction materials globally, aligning with Perma-Pipe’s strategic focus on sustainable infrastructure.