MSA Q1 Earnings Call: Detection Segment Drives Growth Amid Tariff and Currency Headwinds
Safety equipment manufacturer MSA Safety (NYSE:MSA) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 1.9% year on year to $421.3 million. Its non-GAAP profit of $1.68 per share was 6.3% above analysts' consensus estimates.
Is now the time to buy MSA? Find out in our full research report (it's free).
Revenue: $421.3 million vs analyst estimates of $401.3 million (1.9% year-on-year growth, 5% beat)
Adjusted EPS: $1.68 vs analyst estimates of $1.58 (6.3% beat)
Adjusted EBITDA: $101.5 million vs analyst estimates of $96.52 million (24.1% margin, 5.1% beat)
Operating Margin: 21.5%, in line with the same quarter last year
Free Cash Flow Margin: 12.1%, up from 9.6% in the same quarter last year
Market Capitalization: $6.35 billion
MSA Safety's first quarter results reflected higher-than-expected revenue, driven by strong demand in Detection products and some customer acceleration of orders in response to evolving tariffs. Management attributed performance to momentum in both fixed and portable gas detection, as well as selective price increases and ongoing productivity efforts. The Fire Service segment saw a year-over-year decline due to tough comparisons with prior large government orders, but order trends remained stable.
Looking ahead, management maintained a cautious outlook due to ongoing macroeconomic uncertainty and the potential impacts of tariffs and foreign currency headwinds. CEO Steven Blanco noted the company's focus on mitigating higher costs through targeted price increases and long-term productivity improvements. While MSA Safety reaffirmed its commitment to long-term growth targets, leadership acknowledged the year could be uneven as tariff impacts and backlog normalization play out.
MSA Safety's latest quarter was shaped by product demand, operational adjustments, and evolving external factors. The following points summarize the underlying drivers of recent performance and management's strategic response:
Detection Segment Momentum: Strong growth in Detection, especially in both fixed and portable gas detection products, was supported by robust demand across energy and industrial customers globally. Management highlighted the expansion of connected MSA+ offerings as a key factor.
Tariff-Related Customer Acceleration: Some customers accelerated shipments in anticipation of new tariffs, resulting in a pull-forward of just under $10 million in sales, predominantly in the Americas region and with a heavier mix in Fire Service products.
Currency and Inflation Pressure: Gross margins were negatively affected by transactional foreign exchange headwinds, particularly from Latin American currencies, and inflationary pressures. Management expects FX headwinds to persist in the coming quarter.
Targeted Pricing Actions: In response to tariffs, MSA Safety implemented targeted price increases in April and is considering further adjustments depending on tariff developments. Management noted these actions will take time to work through the sales backlog.
Innovation Pipeline and Product Launches: The company launched new products such as the G1 SCBA XR Edition and Globe G-XTREME PRO turnout jacket, aiming to address changing industry standards and customer needs, with positive early feedback from recent industry events.
Management's outlook for the remainder of the year centers on navigating tariff impacts, foreign exchange pressures, and maintaining demand across core product lines. The company's ability to execute cost-saving initiatives and price adjustments will be key determinants of future performance.
Tariff and Pricing Impact: The evolving tariff environment may create short-term volatility as price increases are phased in and customers adapt. Management anticipates most tariff effects—and related mitigation strategies—will become more visible in the second half of the year.
Detection Growth Continuity: Continued strength in Detection products, especially connected and portable devices, is expected to be a primary growth driver, though comps will become more challenging in future quarters.
Operational Efficiency Initiatives: Efforts to improve productivity and reduce costs through supply chain, sourcing, and value engineering are expected to support margins, even if some external pressures persist.
Rob Mason (Baird): Asked how tariff-related order acceleration might affect project decision-making and future quarters; management clarified Detection led ongoing demand, while accelerated shipments included a heavier Fire Service mix.
Ross Sparenblek (William Blair): Inquired about the breakdown of fixed versus portable Detection growth; management reported balanced growth and expects high single-digit increases in Detection for the year.
Ross Sparenblek (William Blair): Sought details on the backlog and product mix impact for Q2; management cited a $40 million backlog conversion last year and noted upcoming comps will be tougher, especially with FX headwinds.
Jeff Van Sinderen (B. Riley FBR): Asked about the size and composition of Q1 pull-forward sales and supply chain adjustments for tariffs; management estimated just under $10 million pulled forward, with ongoing evaluation of pricing and cost actions.
Mike Shlisky (D.A. Davidson): Questioned if cost reduction initiatives tied to tariffs could result in permanent margin improvements; management responded that cost-side gains are expected to be long-term, while pricing may adjust as market conditions evolve.
In upcoming quarters, the StockStory team will watch for (1) sustained growth in Detection, particularly the adoption of connected and portable products; (2) the effectiveness of tariff mitigation strategies, including the impact of phased price increases and operational savings; and (3) stabilization of gross margins amid persistent currency and inflation headwinds. The realization of new product launches and backlog normalization will also be important indicators of strategic execution.
MSA Safety currently trades at a forward P/E ratio of 19.5×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report.
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Why Shares of Oklo Stock Soared 122% Last Month
Oklo is soaring because of narratives around nuclear energy and an executive order. The company aims to get its new reactors to market by 2028, but that may prove to be aggressive timing. The company generates zero revenue but has a market cap of $6.8 billion. 10 stocks we like better than Oklo › Shares of Oklo (NYSE: OKLO) sank this week, according to data from S&P Global Market Intelligence. The company aiming to build what it calls fast-fission nuclear reactors is benefiting from nuclear energy executive orders and a global renaissance for the energy category. Up almost 400% since going public through a special purpose acquisition company (SPAC), the company now has a market cap of $6.8 billion and zero revenue. Here's why shares of Oklo soared in the month of May. Rising demand for electricity has companies in the artificial intelligence (AI) sector looking for truly reliable and renewable energy. Nuclear energy is the only type of energy that checks off both criteria. Large technology companies investing in data centers, like Amazon and Microsoft, are signing commitments to try and get more nuclear power used in their operations. The White House just released an executive order around Nuclear Power, saying the industry in the United States needs to be reinvigorated. All of this talk around nuclear power has stocks such as Oklo soaring. The company's founder was at the executive order signing by President Trump, and the company even put out a press release about the matter. It is aiming to build small fission reactors with recyclable material and aims to have plant operations begin at its first site in Idaho by late 2027 or early 2028. Until then, the company is not generating any revenue. Its stock is all riding on the future and hopes from shareholders that the company can spin itself into one of the nuclear energy leaders of the next few decades. Oklo wants to become a nuclear power giant through its innovative designs. The problem remains around approvals and cash burn. It has a free cash flow burn of $44 million and $200 million in cash on the balance sheet. It says that it aims to get its plant underway by 2028 at the latest, but it has not gotten any approvals from the Nuclear Regulatory Commission (NRC). Competitor NuScale Power Corporation has approval and still doesn't think it can get its reactors up and running until 2030. The timelines don't match up. Investing in pre-revenue stocks is mighty dangerous. Oklo has no sales, is burning a lot of cash, and has never proven its designs work. There are no approvals by the NRC. The stock has a market cap of $6.8 billion, built on castles in the air. If you buy this stock, you are taking a huge risk with your portfolio. Before you buy stock in Oklo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Oklo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Why Shares of Oklo Stock Soared 122% Last Month was originally published by The Motley Fool
