10-Q · August 3, 2026
Alamo Group posted 8% Q2 revenue growth to $450.7 million, led by Industrial Equipment acquisitions and 3% organic segment growth, while adjusted EPS of $2.82 beat the supplied consensus estimate. However, GAAP diluted…
Earnings analysis · 10-Q
ALG earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Alamo Group's third quarter showed a substantial deterioration in profitability: revenue fell 4.0% year over year to $403.137 million, gross margin declined to 18.9%, operating margin dropped to 0.9%, and diluted EPS…
Read full summary
Alamo Group's third quarter showed a substantial deterioration in profitability: revenue fell 4.0% year over year to $403.137 million, gross margin declined to 18.9%, operating margin dropped to 0.9%, and diluted EPS fell to $0.17 from $2.10. Results were heavily affected by approximately $33.3 million of portfolio-optimization charges, while Industrial Equipment weakened despite acquisition contributions. Cash generation remained positive at $83.230 million for the first nine months, but cash declined to $230.650 million and debt increased to $232.314 million before the subsequent $158.7 million Econ acquisition.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.17
What stood out
-
Sharp quarterly earnings deterioration
Third-quarter revenue was $403.137 million, down $16.905 million, or 4.0%, from $420.042 million a year earlier and down from $451 million in Q2 2026. Diluted EPS was $0.17 versus $2.10 year over year and $2.55 in the prior quarter.
-
Margins compressed materially
Gross margin fell to 18.9% from 24.2% year over year and 24.6% in Q2 2026, while operating margin declined to 0.9% from 8.9% year over year and 10.2% in Q2. Management attributed the pressure to $7.3 million of revenue charges, $15.5 million of cost-of-sales charges, lower Industrial Equipment volume, and elevated material and freight costs.
-
Industrial Equipment weakened
Industrial Equipment revenue declined 5.8% to $232.757 million, primarily from lower snow removal, sweeper, and excavator sales; excluding Petersen Industries, the division's sales decreased approximately 13%.
-
Underlying Vegetation trends improved
Vegetation Management revenue declined 1.5% to $170.380 million, but excluding a $7.3 million unfavorable divestiture-related discount and rebate impact, management said sales increased approximately $4.6 million, or 3%, reflecting higher volumes, favorable pricing, and improved throughput.
-
Acquisitions supported growth
Nine-month revenue increased 3.3% to $1.271 billion from $1.230 billion, driven by the Ring-O-Matic and Petersen acquisitions and improvement in agricultural and tree-care markets. Nine-month operating income nevertheless fell to $91.363 million from $129.082 million.
-
Lower capex supports cash generation
Nine-month operating cash flow was $83.230 million versus $102.424 million in the prior-year period, while capital expenditures declined to $16.060 million from $25.400 million. Management expects full-year 2026 capital expenditures of $22.0 million to $27.0 million.
What to watch
-
Portfolio actions hit profitability
The company recognized approximately $33.3 million of net charges in Q3, including $15.475 million in cost-of-sales charges, $9.043 million in SG&A charges, a $7.299 million reduction of sales, and a $1.480 million other-expense impact. Nearly all charges were in Vegetation Management.
-
Acquisition increased leverage
Cash declined to $230.650 million from $309.659 million at December 31, 2025, while total debt increased to $232.314 million from $205.748 million. The subsequent Econ acquisition cost approximately $158.7 million and was funded through the revolving credit facility.
-
Working capital and inventory pressure
Working capital decreased to $751.6 million from $779.7 million at year-end, while accounts receivable increased to $314.015 million from $276.866 million and inventories increased to $420.051 million from $383.252 million. Inventory valuation allowances also rose to $31.471 million from $19.834 million.
-
End-market demand remains uneven
Industrial Equipment revenue fell $14.226 million year over year to $232.757 million, with management citing softer end markets and order timing. The company also reported continued softness in municipal mowing within Vegetation Management.
-
Debt and interest-rate exposure
The new credit agreement had $233.1 million outstanding and $363.6 million of available borrowings at September 30, 2026; variable-rate exposure means a two-percentage-point rate change would alter quarterly interest expense by approximately $1.2 million.
-
No formal risk-factor updates
Item 1A states there were no material changes from the risk factors in the 2025 Form 10-K. However, the filing identifies acquisition integration and cost-savings execution as ongoing risks while Econ adds approximately $158.7 million of post-quarter acquisition exposure.
Management's outlook
No forward EPS or revenue guidance was provided. Management expects full-year 2026 capital expenditures of approximately $22.0 million to $27.0 million and stated that remaining liquidity plus operating cash flow is sufficient for anticipated operating and capital requirements following the Econ acquisition.
Earlier filings 4
10-Q · May 4, 2026
Alamo Group posted robust Q1 2026 results with net sales of $417.1 million, exceeding estimates by $19.8 million, up 7% year-over-year. Adjusted diluted EPS was reported at $2.56, a 0.36 beat over estimates, driven by…
10-K · March 2, 2026
Alamo Group describes a strategy of organic growth plus targeted acquisitions across two divisions (Vegetation Management and Industrial Equipment) and a broad global dealer network; the company operates ~3,800…
10-Q · May 8, 2025
Alamo Group reported Q1 net sales of $390.95 million, down 8% year-over-year, with gross margin marginally higher at 26.3% and operating margin improving to 11.4%. Diluted EPS was $2.64 (vs. $2.67 prior year) and net…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.