Gates Industrial (NYSE:GTES) Posts Quarterly Earnings Results, Beats Expectations By $0.02 EPS

Gates Industrial (NYSE:GTES) issued its quarterly earnings results on Friday. The company reported $0.44 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.42 by $0.02, FiscalAI reports. The business had revenue of $941.60 million for the quarter, compared to analyst estimates of $925.44 million. Gates Industrial had a net margin of 7.23% and a return on equity of 10.00%. The business’s revenue was up 6.6% compared to the same quarter last year. During the same period in the previous year, the business posted $0.39 earnings per share. Gates Industrial updated its FY 2026 guidance to 1.620-1.700 EPS.

Here are the key takeaways from Gates Industrial’s conference call:

• Positive Sentiment: Gates reported record quarterly sales of $942 million, up 6.6% year over year, with core revenue growth of 4.9%, adjusted EBITDA margin of 22.5%, and adjusted EPS up 13% to a record $0.44.
• Positive Sentiment: Broad-based demand improved, led by double-digit industrial OEM growth, approximately 25% growth in personal mobility, 20%+ growth in commercial on-highway, and accelerating APAC and EMEA sales; book-to-bill remained above one.
• Positive Sentiment: Management raised full-year 2026 guidance, including core sales growth of 2.5%-4.5%, adjusted EBITDA of $800 million-$830 million, and adjusted EPS of $1.62-$1.70. The company expects roughly 6% core sales growth and adjusted EBITDA margins of at least 23.5% in the second half.
• Positive Sentiment: Strategic growth initiatives are gaining traction, including personal-mobility belt conversions and data-center applications, where sales more than doubled year over year and are expected to reach $100 million-$200 million by 2028.
• Negative Sentiment: Fluid Power’s adjusted EBITDA margin declined 120 basis points due to footprint realignment and enterprise investments, while oil-related input-cost inflation is persisting; pricing actions are expected to keep the company at least price-cost neutral in the second half.

Gates Industrial Price Performance

Gates Industrial stock traded up $2.23 during mid-day trading on Friday, reaching $28.01. The company had a trading volume of 4,235,054 shares, compared to its average volume of 2,274,580. Gates Industrial has a 1 year low of $20.88 and a 1 year high of $29.17. The company has a debt-to-equity ratio of 0.61, a current ratio of 3.67 and a quick ratio of 2.66. The company has a market capitalization of $7.12 billion, a P/E ratio of 29.18 and a beta of 1.25. The stock’s 50-day simple moving average is $26.63 and its 200-day simple moving average is $25.36.

Hedge Funds Weigh In On Gates Industrial

Several hedge funds and other institutional investors have recently bought and sold shares of GTES. Elevation Point Wealth Partners LLC grew its holdings in Gates Industrial by 49.6% in the fourth quarter. Elevation Point Wealth Partners LLC now owns 12,365 shares of the company’s stock valued at $265,000 after purchasing an additional 4,098 shares during the last quarter. Algert Global LLC acquired a new position in shares of Gates Industrial during the 3rd quarter worth $240,000. Oxford Asset Management LLP acquired a new position in shares of Gates Industrial during the 4th quarter worth $237,000. Bayesian Capital Management LP purchased a new stake in shares of Gates Industrial in the 2nd quarter worth about $233,000. Finally, Brooklyn Investment Group purchased a new stake in shares of Gates Industrial in the 4th quarter worth about $222,000. 98.50% of the stock is owned by institutional investors and hedge funds.

Gates Industrial News Roundup

Here are the key news stories impacting Gates Industrial this week:

• Positive Sentiment: Gates reported second-quarter sales of $941.6 million, up 6.6% year over year, with core sales increasing 4.9%. Revenue exceeded analyst expectations of approximately $925.4 million, indicating solid demand across the business. Gates Industrial Reports Second-Quarter 2026 Results
• Positive Sentiment: Adjusted earnings were $0.44 per share, above the $0.42 analyst consensus and up from $0.39 a year earlier. The company also reported $170.9 million of net income, or $0.67 per diluted share, under its reported accounting measure. Gates Industrial Tops Q2 Earnings and Revenue Estimates
• Positive Sentiment: Gates raised or reaffirmed a favorable FY 2026 adjusted EPS outlook of $1.62 to $1.70, with the midpoint above the current consensus estimate of $1.62. This suggests management expects earnings momentum to continue. Gates Industrial Q2 2026 Earnings Call Transcript
• Neutral Sentiment: Full-year revenue guidance of $3.5 billion to $3.6 billion reaches the consensus estimate only at the upper end; the midpoint is modestly below expectations. Investors may therefore focus on whether stronger core sales can drive results toward the high end of the range. Gates Industrial Earnings Report

Analysts Set New Price Targets

A number of brokerages have weighed in on GTES. Robert W. Baird lowered their price objective on Gates Industrial from $39.00 to $37.00 and set an “outperform” rating on the stock in a report on Monday, May 4th. Weiss Ratings reissued a “hold (c+)” rating on shares of Gates Industrial in a research note on Monday, June 29th. Wolfe Research reissued an “outperform” rating and issued a $33.00 price target on shares of Gates Industrial in a report on Thursday, July 9th. Royal Bank Of Canada lifted their price target on Gates Industrial from $30.00 to $33.00 and gave the company an “outperform” rating in a research note on Thursday, July 16th. Finally, Wall Street Zen lowered Gates Industrial from a “buy” rating to a “hold” rating in a report on Saturday, July 25th. Seven equities research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $31.50.

Gates Industrial Company Profile

Gates Industrial Corporation PLC (NYSE: GTES) is a leading global manufacturer of engineered power transmission belts and fluid power products. The company’s portfolio includes synchronous belts, V-belts, hose assemblies, fittings and hydraulic components designed to support a wide range of industrial and automotive applications. Gates Industrial serves sectors such as agriculture, mining, construction, manufacturing, transportation and consumer markets, offering solutions that improve performance, reliability and efficiency in demanding operating environments.

In its power transmission segment, Gates Industrial produces high-strength belts engineered for precise motion control and minimal maintenance.