Enpro Inc. (NPO) Earnings & Analysis

Latest quarter

Enpro reported third-quarter revenue of $350.8 million, up 22.4% from $286.6 million a year earlier. Adjusted diluted earnings were $2.66 per share, 10.1% above the consensus. Diluted earnings under generally accepted accounting principles rose to $1.88 per share from $1.01.

In its discussion of results, Enpro attributed Sealing Technologies’ sales growth to pricing and mix, demand in several applications, improvements in commercial vehicles and acquisitions. Segment sales rose 20.5% to $214.7 million; excluding acquisitions and currency effects, they rose 11.6%. The company also reported softer European biopharmaceutical demand and a year-over-year difference in the timing of power-generation deliveries.

Enpro said Advanced Surface Technologies sales rose 25.8% to $136.5 million, driven by demand for precision cleaning, semiconductor tools and coatings. Its adjusted segment EBITDA margin reached 25.1%, according to CFO Joe Bruderek.

Bruderek said Enpro generated $129.2 million of free cash flow in the first nine months of 2026, compared with $104.9 million a year earlier, and reduced revolving debt by $55 million during the third quarter.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Eric Vaillancourt said demand associated with advanced semiconductor production was increasing as customers expanded capacity for artificial intelligence, advanced computing and communications infrastructure. He said customer build plans and lead times gave Enpro visibility through at least 2027 for its semiconductor-facing products and services.

CFO Joe Bruderek said precision cleaning demand was tied to advanced chip production, while orders relative to shipments for capital equipment and coatings also continued to improve. In the Q&A, he said some growth previously anticipated over several years was arriving sooner, prompting Enpro to bring investment forward. Bruderek expected capital spending to increase in 2027, but said, “We’re not ready to guide specifically on that specific number.”

Vaillancourt said the planned capacity expansions were tied to customer commitments and new wins. He identified Singapore as the initial focus for leading-edge cleaning, with new vertically integrated products also driving expansion in the United States. Bruderek said some projects were beginning at the end of 2026 and would progress more substantially through 2027.

For Sealing Technologies, Bruderek cited aerospace, domestic general industrial applications and the Alpha and Overlook acquisitions as sales drivers. He also reported softness in European general industrial, food and biopharmaceutical sales. Vaillancourt said pricing actions and operational improvements would help manage cost pressures, and he did not expect a material impact on margins.

Asked about capital allocation, Bruderek said investment in organic growth remained the first priority, followed by acquisitions meeting Enpro’s strategic and financial criteria. Vaillancourt said the acquisition targets Enpro wanted could attract competitive pricing, while the company remained selective. Bruderek also said he expected the Sealing segment’s margin to remain near the high end of its long-term target for the year, though lower sequentially in the fourth quarter because of normal seasonality.

Guidance

Enpro raised its full-year 2026 revenue outlook to $1.33 to $1.34 billion, representing 16% to 17% growth, from its previous forecast of 14% to 16% growth. It increased its adjusted EBITDA forecast to $340.0 million to $345.0 million from $330 to $340 million, and its adjusted diluted EPS forecast to $9.70 to $9.95 from $9.30 to $9.80.

For Advanced Surface Technologies, Bruderek said order and backlog growth supported an improved outlook; Enpro now expects fourth-quarter year-over-year revenue growth and margin rates both above 25%.