Graham Corp (NYSE:GHM), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries, stock rose 1.81% (As on June 10, 1:41:06 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY25. The company achieved a record backlog of $412 million, up 7% sequentially, with a Book-to-Bill ratio of 1.1x for the fifth consecutive year. Graham Corp secured a $136.5 million contract for the Virginia Class Submarine Program, enhancing its stable recurring revenue and visibility into future revenue. The company is making strategic investments, including a $3.6 million project to enhance welding capabilities, supported by a $2.2 million investment from a key defense customer. Graham Corp is expanding its capabilities with a new 30,000 square foot facility in Batavia, New York, and a cryogenic propellant testing facility in Florida, expected to drive future growth.

Meanwhile, Orders for fiscal 2025 decreased to $231 million from $268 million in fiscal 2024, primarily due to the lumpiness of defense market orders. The company will no longer receive a benefit from the welder training grant, which previously contributed to gross profit. The company faces potential impacts from tariffs, estimated to be $2 million to $5 million, affecting fiscal 2026 results. Sales to the Defense market grew by $7.7 million, or 28% from the prior year period, driven by growth in existing programs, better execution, improved pricing, and the timing of key project milestones. Energy & Process sales contributed $1.8 million to growth driven by increased sales of capital equipment to foreign markets and higher aftermarket sales. Aftermarket sales to the Energy & Process and Defense markets of $12.1 million remained strong and were 3.3% higher than the prior year.

GHM in the fourth quarter of FY25 has reported the adjusted earnings per share of 43 cents, beating the analysts’ estimates for the adjusted earnings per share of 19 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 21 percent to $59.3 million in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $55.7 million. Gross margin expanded 110 basis points to 27.0% and achieved operating margin of 9.3% compared to 3.1% in the prior-year period.

The company said it expects fiscal 2026 net sales of $225 million to $235 million. Analysts polled by FactSet expect $225.7 million.