Shares of National Presto Industries, Inc. NPK have declined 7.1% since the company reported its second quarter earnings for the period ended June 29, 2025. Over the same time frame, the S&P 500 index remained nearly flat with a 0.1% gain. For the full month, National Presto stock has slipped 3.1%, in contrast to a 3.1% rise in the broader S&P 500, signaling underperformance relative to the market.
For the second quarter of 2025, National Presto reported earnings per share (EPS) of 72 cents, which decreased from 85 cents over the same period.
Net sales of $120.4 million denoted a 41.6% increase from the $85.1 million posted in the same quarter last year.
Despite this robust top-line growth, net earnings declined 15.2% year-over-year to $5.2 million, compared to $6.1 million in the second quarter of 2024.
Looking at the first six months of the year, cumulative net sales reached $224.1 million, up 38.6% from $161.7 million in the first half of 2024. Net earnings for the six-month period edged up slightly to $12.8 million from $12.6 million a year earlier, with EPS at $1.79 versus $1.78.
National Presto Industries, Inc. Price, Consensus and EPS Surprise
National Presto Industries, Inc. price-consensus-eps-surprise-chart | National Presto Industries, Inc. Quote
Segment Performance and Key Business Metrics
The strong increase in quarterly sales was primarily driven by the Defense segment, which recorded a revenue gain of $33.7 million, or 50.9%, compared to the prior-year quarter. This increase was attributed to heightened shipments from existing backlog orders. In tandem with this volume growth, operating earnings in the Defense segment rose by $5.5 million, representing a 61% increase from the second quarter of 2024.
The Housewares/Small Appliances segment also experienced a revenue increase of $1.7 million, or 9%, year over year. However, this growth did not translate into improved profitability. Instead, the segment posted a sizable operating loss. According to President Maryjo Cohen, the primary cause was the imposition of Trump-era tariffs, which are accounted for as period costs under the LIFO inventory valuation method used in this segment. Additionally, a supplier bankruptcy led to the forfeiture of a deposit, exacerbating the negative impact on earnings.
Meanwhile, the Safety segment delivered only nominal sales and, as anticipated, incurred a loss during the quarter. The company did not report any improvements or outlook shifts for this segment, suggesting that its performance remains a drag on consolidated results.
Management Commentary
President Maryjo Cohen highlighted that the Defense segment remains the company’s key growth driver, supported by backlog execution and new awards. She noted that while Defense benefitted from higher volumes and earnings, the performance of the Housewares/Small Appliances segment was weighed down by external and internal pressures. These included increased tariff costs and supply chain disruptions, such as the supplier bankruptcy.
Cohen also noted that the company’s portfolio earnings for the quarter were “nominal,” citing the sizable investments made in inventory to support expanded Defense operations. This suggests that National Presto is prioritizing future revenue realization from government contracts over short-term financial gains from its investment portfolio.
Factors Influencing Earnings Performance
While sales growth was substantial, particularly in Defense, the company’s overall earnings were pressured by a confluence of challenges. The impact of Trump tariffs on the Housewares segment was significant, reducing earnings through increased period costs. The supplier bankruptcy led to an unrecoverable loss, further eroding segment profitability. Additionally, the decision to tie up capital in Defense-related inventory reduced the company’s ability to generate income from its portfolio, which typically contributes to quarterly earnings. These factors together counterbalanced the positive effects of higher Defense revenue and limited the company’s overall earnings potential.
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This article originally published on Zacks Investment Research (zacks.com).