10-Q · April 29, 2026
Franklin Electric reported strong Q1 2026 results with revenue of $500.4 million, exceeding consensus expectations of $479.2 million, and an EPS of $0.83, above the estimate of $0.77. The quarter demonstrated a 10%…
Earnings analysis · 10-Q
FELE earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Franklin Electric delivered Q2 revenue growth of 6% to $622.9 million and increased GAAP diluted EPS to $1.46 from $1.31, supported by acquisitions, price/volume gains and foreign exchange. Gross margin expanded to…
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Franklin Electric delivered Q2 revenue growth of 6% to $622.9 million and increased GAAP diluted EPS to $1.46 from $1.31, supported by acquisitions, price/volume gains and foreign exchange. Gross margin expanded to 37.0%, although consolidated operating margin remained near 15.0% as a $4.5 million Energy Systems legal settlement offset improvements in Water Systems and Distribution. Cash generation improved in the first half, while higher debt costs, tariff uncertainty and adverse product/geographic mix remain notable offsets.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.46
What stood out
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Revenue rose 6% on broad-based growth
Q2 net sales rose 6% year over year to $622.9 million, driven by roughly 3% from recent acquisitions, 2% from price and volume gains, and 1% from favorable foreign exchange. Acquisitions contributed approximately $15.0 million of Q2 incremental sales.
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Gross-margin expansion offsets expense pressure
Gross margin expanded 90 basis points year over year to 37.0% from 36.1%, while operating income increased 6% to $93.6 million from $88.1 million. Consolidated operating margin was effectively flat at approximately 15.0%.
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Diluted EPS increased 11% year over year
GAAP diluted EPS increased $0.15 year over year to $1.46 from $1.31, as net income attributable to Franklin Electric grew to $65.7 million from $60.1 million.
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Distribution led growth and margin gains
Distribution was the fastest-growing segment: revenue rose 11% to $221.1 million and operating income increased $3.6 million to $19.7 million, lifting segment operating margin 80 basis points to 8.9%.
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Operating cash flow improved substantially
Six-month operating cash flow improved to $58.7 million from $32.0 million. Investing outflows declined to $90.9 million from $127.3 million, primarily on lower acquisition activity.
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Liquidity capacity remains substantial
Liquidity included $236.6 million of available revolver borrowing capacity at June 30, 2026, after $107.0 million of revolver borrowings and $6.4 million of outstanding letters of credit.
What to watch
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Legal settlement compressed Energy margins
Energy Systems operating income fell $1.2 million year over year to $27.9 million, and its operating margin contracted 270 basis points to 34.8%, primarily due to a $4.5 million legal-settlement provision recorded in Q2.
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Higher debt increased interest expense
Interest expense increased to $3.5 million in Q2 from $2.8 million a year earlier, primarily reflecting higher average outstanding debt; the company had $107.0 million drawn on its revolver at June 30, 2026.
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Mix and dewatering demand remain headwinds
Water Systems' six-month operating margin declined 60 basis points to 16.2% due to an unfavorable product and geographic sales mix shift. U.S. and Canada large-dewatering-equipment sales also fell 10% in Q2.
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Tariff and input-cost uncertainty persists
The company reports no material risk-factor changes from its fiscal 2025 Form 10-K, but identifies tariffs as uncertain; it has a remaining $3.4 million non-cancellable copper purchase commitment expected to be fulfilled within the next year.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. Management states that liquidity is adequate for projected needs for the foreseeable future and expects operating needs, capital expenditures, dividends, repurchases and debt service to be funded by cash, operations and existing credit agreements.
Earlier filings 4
10-K · February 20, 2026
Franklin Electric reported 2025 revenue of approximately $2.1 billion while continuing to emphasize Water Systems as the core business (about 60% of 2025 revenue). The company completed M&A in 2025 (PumpEng and Barnes),…
10-Q · October 30, 2025
Franklin Electric reported third-quarter net sales of $581,714 (in thousands), up $50,276 from $531,438 a year ago, with operating income improving to $85,118 from $73,526. A $55,251 pension settlement loss and higher…
10-Q · April 30, 2024
Franklin Electric reported Q1 net sales of $460,900 (in thousands), down from $484,551 a year ago, with diluted EPS of $0.70 versus $0.79 in Q1 2023. Gross profit rose slightly to $163,580 (35.5% of sales) while…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.