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Shares of Espey Mfg. & Electronics Corp. (ESP - Free Report) have declined 10.3% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s 0.8% growth over the same time frame. Over the past month, the stock has gained 14.5% compared with the S&P 500’s 4.5% growth.
For the fourth quarter of 2025, Espey reported net income of $1.05 per share, up from 73 cents per share a year earlier.
The company generated net sales of $9.6 million, down from $11.6 million in the prior-year quarter. Nevertheless, quarterly net income rose to $2.9 million from $1.9 million a year earlier.
Espey Mfg. & Electronics Corp. Price, Consensus and EPS Surprise
Espey posted net income of $8.1 million for fiscal 2025, up from $5.8 million in the prior year, representing an increase of about 40%. The earnings improvement translated into higher earnings per share, with EPS rising to $3.02 from $2.29.
Other Key Business Metrics
Espey’s backlog reached approximately $139.7 million as of June 30, 2025, up sharply from the prior year. The company expects 35% of this backlog to be recognized as revenue in fiscal 2026, 19% in 2027, 15% in 2028, and the remaining 31% thereafter. Export shipments also grew, totaling $3.1 million in 2025 compared with $2.4 million a year earlier.
On the customer side, sales concentration remained high, with six domestic customers accounting for 74% of sales in fiscal 2025. This compares to five customers making up 81% of sales in 2024, underscoring the company’s reliance on a handful of large defense and industrial accounts.
Management Commentary
Management anticipates revenues in fiscal 2026 will be higher than in fiscal 2025. However, net income per share is expected to decline due to orders in the backlog scheduled for shipment with higher anticipated aggregate costs than last year’s mix. Inflationary pressures and ongoing supply chain challenges — particularly long lead times and part obsolescence — remain notable hurdles. In some cases, component waiting times approach a year or more, forcing Espey to adjust its internal schedules and quotations accordingly.
The labor market also presents challenges, with specific skillsets in short supply and lower local unemployment rates creating a competitive recruiting environment. While the company’s workforce remains stable, management emphasized the need for continued training and recruitment beyond its immediate geographic region.
Factors Influencing the Headline Numbers
The improvement in net income was partly shaped by operational adjustments and tax benefits. The provision for income taxes declined to $1.6 million in 2025 from $1.5 million in 2024. Additionally, Espey recorded higher stock-based compensation expenses ($0.35 million vs. $0.28 million in 2024) and a larger ESOP compensation expense ($0.6 million vs. $0.4 million). Despite these rising costs, overall profitability advanced due to revenue growth and operating efficiencies.
Other Developments
Espey received a $3.4 million funding award during fiscal 2025 from the U.S. Navy to support facility and capital equipment upgrades. This investment is part of the Navy’s initiative to strengthen the Surface Combatant Industrial Base. Work tied to this award, including testing and qualification capabilities at Espey’s Saratoga Springs, NY site, is expected to be completed by the end of fiscal 2026.
Additionally, the company finalized its withdrawal from the IBEW Local 1799 Pension Fund, making a final payment of $0.5 million in May 2025. The liability associated with this withdrawal was recognized in product costs and expensed through cost of sales.
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Espey's Q4 Earnings Improve Y/Y, Reports Solid Backlog
Shares of Espey Mfg. & Electronics Corp. (ESP - Free Report) have declined 10.3% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s 0.8% growth over the same time frame. Over the past month, the stock has gained 14.5% compared with the S&P 500’s 4.5% growth.
For the fourth quarter of 2025, Espey reported net income of $1.05 per share, up from 73 cents per share a year earlier.
The company generated net sales of $9.6 million, down from $11.6 million in the prior-year quarter. Nevertheless, quarterly net income rose to $2.9 million from $1.9 million a year earlier.
Espey Mfg. & Electronics Corp. Price, Consensus and EPS Surprise
Espey Mfg. & Electronics Corp. price-consensus-eps-surprise-chart | Espey Mfg. & Electronics Corp. Quote
Fiscal 2025 Update
Espey posted net income of $8.1 million for fiscal 2025, up from $5.8 million in the prior year, representing an increase of about 40%. The earnings improvement translated into higher earnings per share, with EPS rising to $3.02 from $2.29.
Other Key Business Metrics
Espey’s backlog reached approximately $139.7 million as of June 30, 2025, up sharply from the prior year. The company expects 35% of this backlog to be recognized as revenue in fiscal 2026, 19% in 2027, 15% in 2028, and the remaining 31% thereafter. Export shipments also grew, totaling $3.1 million in 2025 compared with $2.4 million a year earlier.
On the customer side, sales concentration remained high, with six domestic customers accounting for 74% of sales in fiscal 2025. This compares to five customers making up 81% of sales in 2024, underscoring the company’s reliance on a handful of large defense and industrial accounts.
Management Commentary
Management anticipates revenues in fiscal 2026 will be higher than in fiscal 2025. However, net income per share is expected to decline due to orders in the backlog scheduled for shipment with higher anticipated aggregate costs than last year’s mix. Inflationary pressures and ongoing supply chain challenges — particularly long lead times and part obsolescence — remain notable hurdles. In some cases, component waiting times approach a year or more, forcing Espey to adjust its internal schedules and quotations accordingly.
The labor market also presents challenges, with specific skillsets in short supply and lower local unemployment rates creating a competitive recruiting environment. While the company’s workforce remains stable, management emphasized the need for continued training and recruitment beyond its immediate geographic region.
Factors Influencing the Headline Numbers
The improvement in net income was partly shaped by operational adjustments and tax benefits. The provision for income taxes declined to $1.6 million in 2025 from $1.5 million in 2024. Additionally, Espey recorded higher stock-based compensation expenses ($0.35 million vs. $0.28 million in 2024) and a larger ESOP compensation expense ($0.6 million vs. $0.4 million). Despite these rising costs, overall profitability advanced due to revenue growth and operating efficiencies.
Other Developments
Espey received a $3.4 million funding award during fiscal 2025 from the U.S. Navy to support facility and capital equipment upgrades. This investment is part of the Navy’s initiative to strengthen the Surface Combatant Industrial Base. Work tied to this award, including testing and qualification capabilities at Espey’s Saratoga Springs, NY site, is expected to be completed by the end of fiscal 2026.
Additionally, the company finalized its withdrawal from the IBEW Local 1799 Pension Fund, making a final payment of $0.5 million in May 2025. The liability associated with this withdrawal was recognized in product costs and expensed through cost of sales.