Latest news with #IvoJurek
Yahoo
16 hours ago
- Business
- Yahoo
Gates Industrial (GTES) Gets Target Hike as Margin Expansion Confidence Grows
Gates Industrial Chemical Corporation (NYSE:GTES) is one of the 8 cheap beginner stocks to buy right now. Jeffrey Hammond, a KeyBanc analyst, raised his price target for Gates Industrial Chemical Corporation (NYSE:GTES) from $23 to $26 on June 9 while maintaining the stock's rating of Overweight. This decision comes after meetings with investors and meetings with Ivo Jurek, the company's CEO. Gates Industrial is effectively controlling manageable elements to boost earnings without depending on higher volume, even as demand trends are erratic. By innovating and gaining market share, the company is also appears to be growing in its markets. Even in the absence of a notable end-market rebound, Hammond stated he is now more confident that Gates Industrial Chemical Corporation (NYSE:GTES) will be able to meet its margin targets by the end of 2026. This confidence is a result of the company's proven ability to improve profit margins and penetrate more markets. Gates Industrial Chemical Corporation (NYSE:GTES) is a multinational producer of fluid power and power transmission solutions. The company supplies products to original equipment manufacturers (OEMs) as well as replacement channel clients in a variety of industrial and consumer markets. While we acknowledge the potential of GTES as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Read More: and Disclosure: None.
Yahoo
14-05-2025
- Business
- Yahoo
GTES Q1 Earnings Call: Margin Initiatives, Tariff Mitigation, and Stable Outlook Drive Results
Power transmission and fluid power solutions provider Gates Corporation (NYSE:GTES) reported Q1 CY2025 results exceeding the market's revenue expectations , but sales fell by 1.7% year on year to $847.6 million. Its non-GAAP profit of $0.36 per share was 8.9% above analysts' consensus estimates. Is now the time to buy GTES? Find out in our full research report (it's free). Revenue: $847.6 million vs analyst estimates of $823.4 million (1.7% year-on-year decline, 2.9% beat) Adjusted EPS: $0.36 vs analyst estimates of $0.33 (8.9% beat) Adjusted EBITDA: $187.3 million vs analyst estimates of $180.9 million (22.1% margin, 3.5% beat) Management reiterated its full-year Adjusted EPS guidance of $1.44 at the midpoint EBITDA guidance for the full year is $765 million at the midpoint, above analyst estimates of $757.8 million Operating Margin: 14.7%, up from 13.5% in the same quarter last year Free Cash Flow was -$10.2 million compared to -$39.1 million in the same quarter last year Organic Revenue rose 1.4% year on year (-3.6% in the same quarter last year) Market Capitalization: $5.81 billion Gates Industrial Corporation's first quarter results were supported by positive core sales growth and ongoing improvements in gross margins, as management credited both pricing actions and operational initiatives for offsetting persistent headwinds in agriculture, construction, and energy end markets. CEO Ivo Jurek highlighted the company's ability to deliver margin expansion despite soft demand in certain industrial sectors, pointing to strong performance in personal mobility and automotive replacement segments as key contributors this quarter. Looking ahead, management reaffirmed its full-year guidance, underscoring plans to counter anticipated tariff costs through further price increases and supply chain optimization. Jurek described the current environment as more uncertain due to recent tariff announcements, but expressed confidence in Gates' resilience and flexible manufacturing footprint. The company's focus remains on compressible cost management and executing enterprise-wide initiatives to protect profitability in the face of ongoing macroeconomic and geopolitical challenges. The latest quarter's financial performance was influenced by a combination of stable replacement channel demand, targeted price increases, and margin-focused operational initiatives. Management's ability to navigate tariff headwinds and supply chain complexities emerged as a central theme on the call. Replacement Channel Growth: Automotive replacement sales rose at a high-single-digit rate, providing a buffer against softness in original equipment manufacturer (OEM) and industrial markets. Management noted that replacement demand was supported by market share gains and an aging vehicle fleet. Personal Mobility Recovery: The personal mobility segment—covering products for bikes, e-bikes, and scooters—recorded over 30% growth. Management cited depleted inventory and increasing consumer adoption as drivers, particularly in Europe and Asia, without evidence of pre-buy activity. Operational Initiatives on Margins: Ongoing enterprise-wide initiatives, including implementation of the company's '80-20' productivity program, contributed to gross margin expansion for the fourth consecutive quarter. Management stated that North America is now implementing back-end operational improvements, with similar efforts ramping up in Europe. Tariff Mitigation Strategy: Leadership explained that approximately 75% to 80% of the estimated $50 million tariff impact in 2025 will be offset through price increases, with the remainder mitigated by operational actions. Pricing realization is expected to align with the timing of tariff costs, particularly in the second half of the year. Channel Inventory Discipline: Management emphasized balanced inventory levels in distribution channels and no evidence of pull-forward demand or pre-buy behavior ahead of tariff changes, indicating stable underlying demand and disciplined channel management. Management's outlook for the remainder of the year is shaped by ongoing tariff mitigation efforts, continued cost optimization, and expectations of stable demand in key end markets, despite persistent macroeconomic uncertainty. Tariff Pass-Through Actions: The company plans to offset most of its increased tariff exposure with targeted price increases, primarily impacting the U.S. market, and expects these actions to preserve adjusted EBITDA margins with only minor dilution. Cost Management and Productivity: Ongoing implementation of operational initiatives—including the expansion of the '80-20' program—remains a strategic priority, aiming to further optimize the manufacturing footprint and compressible costs, particularly in regions facing demand softness. Geographic and End-Market Trends: Management is closely monitoring demand trends across North America, Europe, and Asia, with a particular focus on personal mobility and automotive replacement channels. Risks include potential further declines in OEM demand and continued weakness in agriculture and construction markets. Michael Halloran (Baird): Asked about the cadence of price increases to offset tariffs and potential competitive positioning advantages. Management clarified that price realization will match tariff timing, with operational initiatives handling the remainder, and highlighted Gates' local manufacturing as a differentiator. Julian Mitchell (Barclays): Questioned demand outlook for personal mobility and automotive, as well as tariff classification impacts. Management attributed mobility growth to depleted inventories and new customer wins, and clarified minimal tariff exposure for auto OEM due to regional sourcing. Jeffrey Hammond (KeyBanc): Sought detail on the magnitude and timing of price increases and the mix of manufacturing in Mexico. Management stated that price implementation is a Q2 event with financial impact in Q3, and described flexibility to shift production to optimize tariff compliance. Nigel Coe (Wolfe Research): Inquired about geographic concentration of price increases and whether Gates has a unique competitive advantage from its manufacturing footprint. Leadership responded that pricing is driven by supply chain realities, and confirmed Gates' footprint is more regionally integrated than most competitors. Deane Dray (RBC Capital Markets): Asked about channel partner inventory levels and reactions to tariffs. Management emphasized balanced sales in and out of the channel, with no evidence of pre-buying or inventory build-up, and noted ongoing ramp-up with a new channel partner. In the coming quarters, key areas to watch will include (1) the effectiveness of price increases and operational initiatives in fully offsetting tariff impacts, (2) the sustainability of growth in personal mobility and automotive replacement demand, and (3) the pace of gross margin expansion as the '80-20' program extends into Europe and back-end operations. Channel partner stability and execution on supply chain optimization will also be closely monitored as signposts of successful strategy execution. Gates Industrial Corporation currently trades at a forward P/E ratio of 15.5×. Is the company at an inflection point that warrants a buy or sell? The answer lies in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
Gates Industrial Corp PLC (GTES) Q1 2025 Earnings Call Highlights: Strong Margins Amid Market ...
Total Sales: $848 million, core growth of 1.4%. Adjusted EBITDA: $187 million, margin rate of 22.1%. Gross Margin: 40.7%. Net Leverage: 2.3 times. Share Repurchase: $13 million repurchased, over $100 million remaining under authorization. Adjusted Earnings Per Share: $0.36, an increase of approximately 6%. Power Transmission Segment Revenue: $527 million, approximately 2% increase on a core basis. Fluid Power Segment Sales: $320 million, approximately flat on a core basis. Free Cash Flow: Outflow of $19 million, in line with normal seasonal performance. Return on Invested Capital: 22.5%. 2025 Guidance: Core revenues down 0.5% to up 3.5%; Adjusted EBITDA $735 million to $795 million; Adjusted EPS $1.36 to $1.52. Warning! GuruFocus has detected 4 Warning Signs with NOG. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Gates Industrial Corp PLC (NYSE:GTES) reported first quarter sales that outpaced initial guidance, with core sales growth of 1.4%. The company's adjusted EBITDA margin exceeded 22%, and gross margin expanded to 40.7%. Gates Industrial Corp PLC (NYSE:GTES) maintained a solid balance sheet with a net leverage ratio of 2.3 times, slightly improved year over year. The company repurchased $13 million of shares during the quarter, with over $100 million remaining under the existing authorization. Gates Industrial Corp PLC (NYSE:GTES) is well-positioned to mitigate tariff impacts through price increases and operational initiatives, with a strong in-region manufacturing footprint. The company experienced ongoing softness in the agriculture and construction markets, as well as weakness in energy. Total revenues were down just under 2% due to unfavorable foreign currency effects. Adjusted EBITDA margin decreased by 60 basis points year over year, impacted by non-recurring profit benefits from the prior year. Industrial OEM sales declined low double digits on a core basis, with demand softness in agriculture and construction markets. The company faces increased uncertainty in the market due to tariff impacts and is managing costs closely to prepare for potential demand fluctuations. Q: On the tariff side, how does the cadence of offsetting the tariff impact play out through the year? A: (L. Brooks Mallard, CFO) We expect minimal impact in Q2, with the third and fourth quarters closely matched, resulting in no material dollar impact. We anticipate about a 25 basis point EBITDA margin dilution for the year due to tariffs. (Ivo Jurek, CEO) We plan to offset 75-80% of the $50 million tariff impact with price increases and the rest through operational initiatives. Q: Can you provide an update on the internal initiatives and their interaction with tariff remediation actions? A: (Ivo Jurek, CEO) We are ahead of schedule on our 80/20 initiatives, contributing to gross margin performance. We continue to focus on material cost reductions and productivity improvements. The footprint optimization will progress as planned, with compressible costs being managed to protect operating margins. Q: How have end market expectations changed, particularly for personal mobility and auto sectors? A: (Ivo Jurek, CEO) Personal mobility showed stronger growth than expected, with no pre-buy activity observed. Auto builds are down more than anticipated, but the auto replacement market remains robust due to aging car fleets and stable employment. Energy and off-highway markets are slightly weaker, while construction and agriculture are as expected. Q: What is the impact of price increases and FX on core growth guidance? A: (L. Brooks Mallard, CFO) We plan to offset $50 million of tariff impact with $40 million from pricing and $10 million from operational improvements. FX headwinds are about 100 basis points less than initially thought, impacting EBITDA in a normal fashion. Q: How is the company positioned competitively regarding tariffs and manufacturing footprint? A: (Ivo Jurek, CEO) Gates is well-positioned with an in-region manufacturing strategy, minimizing tariff impacts. Most competitors have less favorable footprints. We have full manufacturing capabilities in Mexico and the US, with minimal USMCA non-compliance. Q: Can you discuss the channel partners' inventory and any pre-buy activity? A: (Ivo Jurek, CEO) We have not observed any meaningful pre-buy activity. Sales in and out of the channel are balanced, with no significant inventory build-up. We remain a short-cycle company, and demand aligns with expectations. Q: What is the status of the 80/20 initiative and its role in offsetting tariff impacts? A: (Ivo Jurek, CEO) The 80/20 initiative is central to our operations, with good progress in North America and plans to expand in Europe. It will help offset macroeconomic challenges and improve productivity and margins. Q: What are the plans for capital deployment, considering the current leverage and M&A environment? A: (Ivo Jurek, CEO) We plan to be opportunistic with our $100 million share repurchase authorization. M&A opportunities are available, but any transaction must deliver double-digit ROIC by year three. We remain disciplined in our approach. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Gates Expands Data Center Cooling Portfolio with Breakthrough Large-Diameter Hose
Data Master™ MegaFlex™ is the first-of-its-kind large-diameter hose that combines ultra-flexibility with coolant compatibility for the demanding high-density digital infrastructure DENVER, March 28, 2025 /PRNewswire/ -- Gates (NYSE: GTES), a global manufacturer of innovative, highly engineered power transmission and fluid power solutions, today announced the launch of Data Master MegaFlex. This groundbreaking large-diameter cooling hose expands the company's data center product portfolio, joining the Data Master™ small-diameter hose, which launched in 2024. The Data Master MegaFlex unlocks new opportunities within data centers and will enable Gates to serve a broader set of customers in today's digital-first world. With the introduction of Data Master MegaFlex, Gates delivers a high-performance solution specifically created for high-flow supply of liquid cooling systems in data centers. Designed to handle the intense thermal loads of high-density server environments, this large-diameter hose is ideal for critical connections where efficient, large-volume coolant transfer is essential, such as those between cooling distribution units (CDUs) or rack manifolds. "At Gates, we are committed to anticipating and innovating for the ever-evolving challenges of data center applications," Gates CEO, Ivo Jurek shared. "Data Master MegaFlex exemplifies our ability to combine our application expertise, industry-leading engineering, and advancing materials science investments to redefine data center cooling market's expectations." Created with Gates® MegaFlex™ engineered solution, this innovation allows the hose to bend to an extremely tight radius without kinking or restricting flow. Traditional large-diameter hoses are often rigid and difficult to install, requiring additional space and fittings that increase cost and complexity. Data Master MegaFlex overcomes these challenges with up to 75% tighter minimum bend radius than competitive alternatives—enabling easier installations, cleaner layouts, and greater design flexibility in high-density environments. This large-diameter offering ranges in size from 1.25" to 2" enabling higher-volume, faster coolant flow to maximize heat transfer and minimize system strain. Leveraging Gates advanced materials science expertise, the Data Master MegaFlex is engineered with a peroxide-cured EPDM tube, which offers excellent compatibility with multiple coolant types, including PG25 ensuring coolant purity in high-stress, closed-loop systems. This material advantage supports system longevity and reduces the risk of performance degradation over time, an essential requirement of liquid-cooled data centers. The Data Master MegaFlex reinforces the company's commitment to pioneering innovation in data center cooling, solidifying Gates role as a trusted partner for next-generation data center infrastructure. The Data Master MegaFlex cooling hose will be available beginning April 2025. For more information about Gates Data Center Solutions or to speak with an expert, please visit About Gates Industrial CorporationGates is a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. Gates offers a broad portfolio of products to diverse replacement channel customers, and to OEMs as specified components. Gates participates in many sectors of the industrial and consumer markets. Our products play essential roles in a diverse range of applications across a wide variety of end markets ranging from harsh and hazardous industries to everyday consumer applications, including virtually every form of transportation. Our products are sold in more than 130 countries across our four commercial regions: the Americas; Europe, Middle East & Africa; Greater China; and East Asia & India. For more information, visit Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "predicts," "intends," "trends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. These statements include, but are not limited to, statements related to expectations regarding the performance of the Company's business and financial results (including our ability to drive margin improvements, our capital deployment optionality, and the impact from investments in our business), and statements regarding our outlook for 2025. Such forward-looking statements are subject to various risks and uncertainties, including, among others, economic, political and other risks associated with international operations (including the imposition of tariffs), risks inherent to the manufacturing industry, macroeconomic factors beyond the Company's control (including material and logistics availability, inflation, supply chain and labor challenges and end-market recovery), risks related to catastrophic events, continued operation of our manufacturing facilities, including as a result of cybersecurity attacks, our ability to forecast and meet demand and market acceptance of new products. Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2024, which is expected to be filed with the Securities and Exchange Commission on or about the date of this presentation, as such factors may be updated from time to time in the Company's periodic filings with the SEC, which are accessible on the SEC's website at Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. View original content to download multimedia: SOURCE Gates Corporation Sign in to access your portfolio
