Federal Signal Corporation (NYSE:FSS) saw its shares rise 5% in premarket trading after reporting second-quarter earnings that beat analyst expectations and prompting the company to raise its full-year guidance.
The provider of environmental and safety solutions posted adjusted earnings per share of $1.17 for the quarter ended June 30, topping the analyst consensus of $1.06. Revenue came in at $565 million, outperforming the $537.3 million estimate and reflecting a 15% increase year-over-year. Organic growth accounted for $42 million, or 9%, of the revenue gain.
“In what is typically a seasonally-strong period, our businesses were able to deliver 15% YoY net sales growth, 20% operating income improvement, gross margin expansion, and a 100-basis point increase in adjusted EBITDA margin during a record-setting second quarter,” said Jennifer L. Sherman, President and Chief Executive Officer.
Most of the revenue came from the Environmental Solutions Group, which recorded an 18% sales increase to $481 million compared to the prior-year quarter. The Safety and Security Systems Group also contributed with a 3% revenue rise to $84 million.
Federal Signal reported a strong order intake of $540 million, up 14% from last year, maintaining a solid backlog of $1.08 billion.
Following the robust quarterly performance, the company raised its full-year 2025 revenue forecast to a range of $2.07 billion to $2.13 billion, up from its previous estimate of $2.02 billion to $2.10 billion. This new outlook exceeds the analyst consensus of $2.05 billion. The adjusted EPS guidance was also increased to between $3.92 and $4.10, above the consensus estimate of $3.83.
Additionally, Federal Signal lifted its consolidated EBITDA margin target to a new range of 16% to 22%, up from 14% to 20%.
Operating cash flow for the quarter jumped 47% to $60 million, providing the company with added flexibility to fund growth initiatives, acquisitions, and shareholder returns. During the period, Federal Signal paid $8.5 million in dividends and repurchased $20 million of its shares.
Federal Signal Corporation stock price
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