Advanced Drainage Systems Reports Strong Third-Quarter Earnings

By Chris Wack

Advanced Drainage Systems (ADS) saw a significant boost in its shares, which rose by 13% to $155.71, following the company's impressive third-quarter earnings report.

Impressive Financial Performance

ADS hit a new 52-week high of $159.49 during the trading session and has experienced a remarkable 63% increase over the past year. The water management company reported quarterly earnings of $105.6 million, or $1.34 per share, demonstrating growth from $82 million, or 99 cents per share, during the same quarter last year.

Analysts' Expectations Surpassed

According to analysts polled by FactSet, earnings of $82.2 million, or $1.02 per share, were anticipated. However, ADS surpassed these predictions with adjusted earnings of $1.37 per share, exceeding analysts' forecast of $1.06 per share.

Steadfast Sales Performance

ADS reported sales of $662.4 million for the quarter, slightly lower than last year's $665.2 million but surpassing analysts' expectations of $632.7 million. The company predicts sales for fiscal year 2024 to range between $2.8 billion and $2.85 billion, while analysts anticipate sales of $2.78 billion.

Notable Growth Drivers

Despite facing challenges such as higher interest rates, credit tightening, and economic uncertainty, ADS experienced sales growth in the quarter. This growth was primarily driven by increased demand in the infrastructure, residential, and agriculture markets, with its Infiltrator business and Allied products portfolio outperforming expectations.