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Atkore posted sequential improvement in Q2 with net sales of $731 million, adjusted EBITDA of $81 million and adjusted EPS of $1.23, while organic volumes rose about 5% year‑over‑year.
The company took a material non‑recurring hit tied to the PVC pipe antitrust matter, recording a $136.5 million pre‑tax liability for settlements of two of the three classes (payment expected in Q3), plus other one‑time depreciation and impairment charges.
Management cited strong demand from data centers (described as double‑digit growth) and solar supporting mid‑single‑digit organic growth, and reaffirmed full‑year guidance of $2.9–2.95 billion in net sales, $340–360 million in adjusted EBITDA and $5.05–5.55 in adjusted EPS.
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Atkore (NYSE:ATKR) reported sequential improvement in its fiscal 2026 second quarter results, supported by higher volumes, modest price increases, and ongoing productivity initiatives, while also absorbing a major litigation-related charge tied to the PVC pipe antitrust matter.
President and CEO Bill Waltz said the company was “pleased with our second quarter performance,” highlighting net sales of $731 million, adjusted EBITDA of $81 million, and adjusted EPS of $1.23. Waltz noted all three metrics improved sequentially from the first quarter, and that organic volume increased 5% year-over-year with contributions from both the Electrical and Safety & Infrastructure (SNI) segments.
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Chief Financial Officer John Deitzer said adjusted EPS of $1.23 compared with $2.04 in the prior-year quarter. He also pointed to a year-over-year rise in net sales driven by “increases in both organic volumes and average selling prices,” calling it “the first quarterly increase in net sales since the fourth quarter of fiscal 2022.”
Management emphasized that the quarter included several non-recurring items. Waltz said Atkore entered into agreements to settle two of the three putative classes in the PVC pipe antitrust litigation. Deitzer said the company recorded a pre-tax liability of $136.5 million, reflected as a non-operating expense in second quarter results, and that the company anticipates making the payment in the third quarter.
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Deitzer also cited costs tied to the company’s strategic actions, including “accelerated asset depreciation at the recently exited manufacturing sites,” along with asset impairments and carrying-value adjustments related to divestitures.
Atkore’s effective tax rate in the quarter was approximately 22%, down from 24.7% a year ago, which Deitzer said reflected the impact of discrete items. He added that growth in the company’s solar business has “generated additional tax benefits compared to the prior year.”
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Deitzer said organic volumes rose about 5% year-over-year in the quarter, while average selling prices increased 1.5%. He said pricing gains included steel conduit and cable, while PVC-related products declined within the Electrical segment. In SNI, mechanical tube products saw selling price increases.
Year-to-date, Deitzer said volume was up mid-single digits versus the prior year, with growth in four of the company’s five product categories. He attributed continued strength in metal framing, cable management, and construction services to data center demand in the U.S. and internationally, noting that the business faced “a tough comp” after growing roughly 10% in the first six months of fiscal 2025 but is “growing again in fiscal 2026.”
Additional volume drivers discussed on the call included:
Growth in plastic pipe, conduit, and fittings across electrical and water products
Healthy demand for larger sizes of steel conduit
Rising demand for specialty conduit products such as stainless steel and fiberglass
Improved momentum for large utility-scale solar projects supporting the mechanical tube business
Management also reiterated a capacity shift within its 80/20 initiative. Deitzer said the company is “shifting certain available capacity from our existing non-solar mechanical products to our electrical conduit products,” and that this will continue throughout the year.
In response to a question from Citigroup’s Andrew Kaplowitz on market drivers, Waltz characterized data center-related demand as “double-digit growth,” while saying other verticals were “low to mid-single-digit growth.” He also said distributors have been “optimistic,” citing “good backlogs” for the rest of the year. John Pregenzer, COO and President of Electrical, added that data centers are “a big part” of Atkore’s global construction services efforts and, along with solar, are expected to be “two key areas” supporting second-half growth.
Deitzer said the Electrical segment posted year-over-year net sales growth driven by higher volumes and selling prices, with adjusted EBITDA margins improving sequentially from the first quarter but still below the prior-year level.
In SNI, net sales were lower year-over-year despite higher volume and average selling prices, which Deitzer said was offset by the impact of the first-quarter divestiture of the Tectron tube product line and by “incrementally higher tax credits passed to solar end customers.” SNI adjusted EBITDA and margins both declined year-over-year, and Deitzer noted the prior-year second quarter included approximately $11 million of mostly one-time, project-based benefits.
Kaplowitz also asked about commodity spreads. Deitzer said the second quarter saw more cost impact from steel, while the company is seeing spread compression from copper and aluminum in its cable business. He said Atkore is recovering a portion through higher selling prices, but called compression “significant.” Deitzer also stated the cable business is about 17% of company sales and was down in volume but flat in revenue, with a cost-structure and margin impact tied to the volume decline.
Atkore continued to outline progress on its portfolio actions. Waltz said the company completed the divestiture of its high-density polyethylene (HDPE) business after the quarter ended and announced the sale of its surface protection and powder coating business in Belgium, while continuing to operate a metal framing and cable support systems facility there.
Pregenzer said the HDPE divestiture included five manufacturing facilities, and Atkore will retain a 10% ownership interest in a combined business that includes Infra Pipe’s existing HDPE operations. He also said that excluding HDPE, Electrical adjusted EBITDA margins “would have been around 150 basis points higher” in fiscal Q2.
Waltz said the company’s strategic review committee and board are still considering “all options” and are not committing to a specific timeframe. In response to KeyBank’s David Tarantino on cost savings, Waltz said the company has “hit every one” of the initiatives outlined last fall, including the closure of three U.S. facilities—actions previously expected to deliver $10 million-$12 million of annualized savings, with possible upside.
On imports, Pregenzer said steel conduit imports from Mexico have declined month-over-month and estimated they are now in the “high 10s to mid-10s” as a share of the market, down from the low-to-mid 20s previously. Waltz said PVC products are still “coming in” and described PVC imports as growing.
Looking ahead, Deitzer reaffirmed guidance while adjusting the net sales outlook for divestitures. The company expects full-year fiscal 2026:
Net sales of $2.9 billion to $2.95 billion
Adjusted EBITDA of $340 million to $360 million
Deitzer said the third and fourth quarter tax rate is expected to be 22% to 24%. He also said Atkore expects sequential growth from Q2 to Q3 in net sales, adjusted EBITDA, and adjusted EPS, followed by slight sequential growth from Q3 to Q4 in all three metrics.
In closing remarks, Waltz reiterated three themes: sequential improvement in sales and profit in the second quarter, confidence in achieving mid-single-digit organic volume growth for the full year, and continued execution of strategic actions intended to sharpen the company’s focus on electrical infrastructure and support long-term value creation.
Atkore International Group Inc (NYSE: ATKR) is a diversified global manufacturer of electrical raceway and mechanical products, serving a broad range of end markets including commercial construction, industrial facilities and energy infrastructure. The company's electrical product portfolio encompasses conduit, tubing, fittings, connectors and cable management systems designed for use in residential, commercial and industrial wiring applications. On the mechanical side, Atkore offers pipe support solutions, seismic bracing, HVAC hangers and other mechanical products that address critical building and process piping needs.
Founded as a family-owned business before its reorganization into a standalone public company in 2016, Atkore has grown through both organic investment and targeted acquisitions.
The article "Atkore Q2 Earnings Call Highlights" was originally published by MarketBeat.