Shares of Sypris Solutions, Inc. SYPR have declined 3.6% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has declined 3% compared with the S&P 500’s 4.3% decrease.
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For the fourth quarter of 2024, Sypris Solutions reported net earnings per share of 1 cent against a net loss of 5 cents per share in the fourth quarter of 2023.
The company reported revenues of $33.4 million, down 3.7% from $34.7 million in the same period a year earlier. Despite the decline in top-line revenues, it swung to a net profit of $0.1 million against a net loss of $1.1 million in the fourth quarter of 2023.
Gross profit increased 23.1% year over year, reaching $5.4 million, with gross margin improving by 350 basis points.
Sypris Solutions, Inc. Price, Consensus and EPS Surprise
Sypris Solutions, Inc. price-consensus-eps-surprise-chart | Sypris Solutions, Inc. Quote
Segment Performance and Key Metrics
Sypris Technologies posted quarterly revenue of $19.5 million, a 2.7% increase from $19 million a year ago, driven by robust energy product shipments. Gross profit for the segment rose 41.6% to $4.4 million, resulting in a gross margin of 22.5%, up from 16.3% in the prior-year period. The improvement reflected favorable exchange rates and product mix alongside ongoing productivity enhancements.
In contrast, Sypris Electronics reported revenues of $13.9 million, down 11.5% from $15.7 million in the year-ago quarter. The segment faced temporary shipment delays caused by material and supplier quality issues. Gross profit dropped to $1 million or 7.1% of revenues compared to $1.3 million or 8.1% a year earlier. Higher labor and overhead costs on programs ramping up production also weighed on profitability.
Management Commentary
President and CEO Jeffrey T. Gill emphasized the positive momentum in Sypris Technologies, citing a year-over-year increase in energy product sales and a broader order book. He pointed to growing global demand for LNG and power infrastructure driven by the expansion of AI data centers as supportive of future growth.
Regarding Sypris Electronics, Gill noted that demand remains strong in key end markets, including electronic warfare, avionics, radar, and subsea communications. Despite short-term delays, the business maintains a robust backlog exceeding $90 million, much of which is backed by customer funding under multi-year purchase orders, expected to support operations well into 2025.
Drivers of Performance
The contrasting fortunes of the two business segments largely shaped the quarter’s results. While Sypris Technologies capitalized on favorable market dynamics and internal efficiency improvements, Sypris Electronics struggled with external supply chain constraints. Nevertheless, the consolidated gross margin expansion and return to quarterly profitability mark operational progress.
Inventory management also showed improvement, with inventory balances decreasing from $77.3 million at the end of 2023 to $66.7 million at the close of 2024, boosting working capital efficiency. Net cash provided by operating activities swung to a positive $2 million from negative $11.1 million in the prior year, reflecting better operational control and improved receivables performance.
2024 Update
For the full year, revenues rose 2.9% to $140.2 million. The company incurred a net loss of $1.7 million, or 8 cents per share, slightly wider than the net loss of $1.6 million, or 7 cents per share, for 2023.
2025 Outlook
Sypris issued 2025 guidance projecting revenues between $125 million and $135 million, implying a modest decline at the midpoint compared to 2024. This is partly due to a shift in the company’s Mexican operations to a value-add-only sub-maquiladora basis, reducing reported revenues without affecting total output.
Management also expects gross margin to expand by 150 to 175 basis points and gross profit to increase by 10% to 15%.
The company acknowledged potential cyclical headwinds in the commercial vehicle market but expressed confidence that these would be offset by strength in energy and defense-related programs.
Other Developments
Notably, Sypris continued to reduce capital expenditures year over year, investing $1.1 million in 2024 versus $2.1 million in 2023, and ended the year with a higher cash balance of $9.7 million.
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