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Canada's ATS Q2 revenue falls 8.6%, misses estimates

By Reuters News


Overview

  • Canada automation solutions provider's Q2 revenue fell 8.6% yr/yr, missing analyst expectations

  • Adjusted EPS missed analyst expectations

  • Company repurchased C$61.3 mln in shares under NCIB


Outlook

  • ATS expects Q3 fiscal 2027 revenues of C$640 mln to C$680 mln

  • Company no longer expects modest revenue growth or 50-75 bps margin expansion in fiscal 2027

  • ATS expects recent US tariff modifications to benefit future order activity and customer capex plans


Result Drivers

  • LOWER ORGANIC REVENUE - Co said revenue decline was mainly due to lower organic revenue and reduced construction contract activity

  • MIXED END-MARKET PERFORMANCE - Co cited lower life sciences, industrial & consumer, and food & beverage revenues due to timing of customer projects and lower backlog

  • ORDER DELAYS AND TARIFFS - Co said delays in non-life sciences order bookings were worsened by US tariffs on Canadian packaging equipment


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Miss

C$665.80 mln

C$681.59 mln (7 Analysts)

Q2 Adjusted EPS

Miss

C$0.27

C$0.33 (7 Analysts)

Q2 Net Loss

C$5 mln

Q2 Loss Per Basic Share

C$0.05

Q2 Order Backlog

C$2.009 bln

Q2 Orders

C$827 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

  • Wall Street's median 12-month price target for ATS Corporation is C$41.00, about 54.7% above its November 3 closing price of C$26.50

  • The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 19 three months ago


Reuters Recommended Reads

  • Nov 3 - Trump says US close to trade deal with Canada, Carney says work remains

  • Nov 3 - Canada has made progress in US trade talks, more work to do, Carney says

  • Nov 3 - Knife River Q3 revenue misses estimates on contracting services headwins


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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