Gates Industrial Corporation shares surged approximately 15.8 percent after the power transmission manufacturer reported first-quarter 2026 results that exceeded Wall Street expectations.
The Denver-based company posted net sales of $851.1 million, up 0.4 percent year over year, with adjusted earnings per share of $0.35 and adjusted EBITDA of $177.4 million at a 20.8 percent margin. Net income attributable to shareholders was $59.7 million, or $0.23 per diluted share.
CEO Ivo Jurek said the company executed well through a European ERP transition and exited the quarter with a book-to-bill ratio above one. Gates reiterated full-year guidance calling for core sales growth of 1 to 4 percent and adjusted EPS of $1.52 to $1.68.
Analysts cited improving industrial OEM order trends and a Moody’s credit rating upgrade to Ba2 as catalysts. The stock’s rally outpaced broader industrial sector gains on the New York Stock Exchange Friday session.
Shares trade on the New York Stock Exchange under ticker GTES. The company is pursuing integration of Timken assets to consolidate power transmission product lines. First-quarter core revenue declined 2.9 percent excluding currency effects, partly due to ERP transition disruptions in Europe. Free cash flow conversion guidance exceeds 90 percent for the full year.
Industrial distributors reported mixed demand in North America and Europe. Gates repurchased shares in the first quarter while maintaining investment-grade credit metrics after the Moody upgrade. Analyst price targets rose following the earnings beat and guidance reaffirmation.
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Sources:
https://www.thestreet.com/stock-market-today/stock-market-today-dow-jones-sp-500-nasdaq-updates-may-21-2026