PPIH Stock Soars 46% as Q1 Earnings Rise Y/Y on Solid MENA Growth

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20-06-2025

Shares of Perma-Pipe International Holdings, Inc. PPIH have surged 45.5% since the company released its earnings for the quarter ended April 30, 2025. This robust advance notably outpaced the S&P 500 index, which declined by 1% during the same period. Over the past month, PPIH's momentum accelerated further with a 63.8% gain, while the S&P 500 posted a modest 1% increase.
Perma-Pipe posted earnings per share of 61 cents in the first quarter of fiscal 2025, which rose from 18 cents in the prior-year quarter on the back of both volume growth and enhanced project execution. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company's net sales of $46.7 million marked a 36.2% jump from $34.3 million in the same quarter last year. Net income attributable to common stock soared to $5 million from $1.4 million, marking a 243% year-over-year increase. Gross profit improved to $16.7 million, representing 36% of net sales, up from $10.5 million or 31% of sales in the year-ago period. Income from operations more than doubled to $7.9 million, reinforcing the company's improved operational leverage.
Perma-Pipe International Holdings, Inc. price-consensus-eps-surprise-chart | Perma-Pipe International Holdings, Inc. Quote
The performance was buoyed by increased sales volumes in both the Middle East and North America, suggesting diversified demand across key operating geographies. Management highlighted that the Americas and the MENA region delivered comparable results, contributing significantly to the overall performance uptick. The combination of higher sales volumes and improved product mix led to better margins, helping gross profit expand by $6.2 million.
General and administrative costs rose $1.6 million to $7.7 million, driven by higher payroll and professional fees. Selling expenses remained steady year over year. Meanwhile, net interest expense and other non-operating costs were essentially flat compared to the prior-year quarter.
President and CEO Saleh Sagr characterized the quarter as 'unprecedented,' noting that both net sales and net income attributable to common stock reached their highest levels for a first quarter since the company's rebranding in 2017. Sagr emphasized that first-quarter net income already represents approximately 55% of the company's total earnings for fiscal 2024, hinting at strong momentum heading into the remaining quarters of fiscal 2025.
He also expressed confidence in the company's competitive positioning and strategy, particularly in its ability to participate in development initiatives in the MENA region and to expand its market share in North America.
Perma-Pipe's improved financial results were primarily driven by increased project volumes and effective execution strategies. The higher margin performance is credited to a more favorable product mix and enhanced project management practices. These operational improvements are especially noteworthy given the inflationary and geopolitical uncertainties affecting global infrastructure markets.
Management commentary suggested a bullish outlook for the remainder of fiscal 2025, citing a strong sales pipeline and sustained market activity across regions. The company's ability to maintain robust backlog levels is expected to support this growth trajectory.
Backlog as of April 30, 2025, stood at $131.1 million, more than double the $63.1 million reported at the same point last year, despite a sequential dip from $138.1 million at the end of January 2025. This year-over-year growth of 108% in backlog signals a robust demand environment and underpins management's optimism about near-term business prospects.
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This article originally published on Zacks Investment Research (zacks.com).
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