Steel wire manufacturer Insteel (NYSE:IIIN) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 26.1% year on year to $160.7 million. Its non-GAAP profit of $0.55 per share was 90% above analysts’ consensus estimates.

Is now the time to buy IIIN? Find out in our full research report (it’s free).

  • Revenue: $160.7 million vs analyst estimates of $149.9 million (26.1% year-on-year growth, 7.2% beat)

  • Adjusted EPS: $0.55 vs analyst estimates of $0.29 (90% beat)

  • Adjusted EBITDA: $19.19 million vs analyst estimates of $12.51 million (11.9% margin, 53.4% beat)

  • Operating Margin: 8.5%, up from 6.2% in the same quarter last year

  • Free Cash Flow was -$5.54 million compared to -$580,000 in the same quarter last year

  • Market Capitalization: $693.8 million

Insteel’s first quarter results reflected substantial momentum in shipment volumes and improved cost management, as discussed during the company’s recent earnings call. Management identified stronger demand in construction end markets and operational efficiencies following a recent acquisition as the main contributors to the quarter’s above-expectation revenue and profit. CEO H.O. Waltz highlighted that the acceleration in business activity was “not reflected in the broader macroeconomic indicators” but remained tangible through customer engagement and robust order books.

Looking ahead, management expressed cautious optimism for the remainder of the year, noting that the primary risk lies in the evolving U.S. trade and tariff environment. Waltz pointed to ongoing uncertainties surrounding raw material supply and the impact of new or adjusted tariffs, especially relating to Section 232, as key variables that could influence future performance. The company’s ability to manage these inputs and maintain production levels will be central to meeting its targets in upcoming quarters.

Management emphasized that shipment growth and successful integration of acquired assets were key drivers behind the quarter’s performance and provided updates on tariff impacts and supply chain trends.

  • Construction Demand Recovery: Recovery across construction end markets fueled significant shipment volume gains and supported higher production utilization rates, offsetting previous periods of industry softness.

  • Tariff Policy Changes: The extension of Section 232 tariffs to finished products, such as PC strand, addressed a years-long competitive disadvantage and is expected to improve Insteel’s market position relative to offshore competitors.

  • Raw Material Supply Constraints: Tight domestic supply of hot-rolled steel wire rod, the company’s primary input, remains a concern. Management noted two U.S. mill closures and limited alternative sources, increasing the need for imports and raising supply chain risks.

  • Acquisition Integration: Integration of two newly acquired manufacturing facilities has been completed, with operational and freight synergies already being realized. The company closed one facility but reported that the remaining assets are operating efficiently.

  • Capital Expenditure Adjustments: Management reduced the full-year capital spending target to $17 million from $22 million, citing acquisition-related resource allocation and a focus on projects that support product expansion and cost reduction.