Why Did Quanex Plunge 16.93% After Earnings Miss?

On September 5, 2025, Quanex Building Products Corporation (NYSE:NX) experienced a significant drop of 16.93% in pre-market trading, reflecting investor concerns following the company's third-quarter earnings report.

Quanex reported third-quarter adjusted earnings of $0.69 per share, falling short of the consensus estimate of $0.85 per share. This earnings miss was a key factor in the stock's decline, as investors had anticipated better performance.

The company's net sales for the quarter soared 76.7% year-over-year to $495.3 million, largely driven by the August 2024 acquisition of Tyman plc. However, despite the impressive top-line growth, the company reported a loss of $276 million for the fiscal third quarter, further dampening investor sentiment.

Quanex's adjusted earnings per share and net income both missed estimates, with adjusted EBITDA also falling short of consensus. The company's organic sales growth, excluding the Tyman acquisition, was modest at 1.4%, primarily due to price increases offsetting weaker demand.

Despite the challenges, Quanex has taken steps to strengthen its financial position, including boosting its gross margin to 27.9% and reducing debt by $51 million. The company has also adjusted its full-year revenue guidance to $1.021 billion to $1.025 billion for fiscal year 2025, implying 37% growth at the midpoint.

Analysts remain generally upbeat about Quanex's long-term prospects, with the median price target sitting nearly 42% higher than the latest share price. However, the short-term impact of the earnings miss and lowered guidance has led to a significant sell-off in the stock.