Albany International reported record third-quarter revenue, lifted by a renegotiated helicopter contract and strong performance in its Engineered Composites segment, according to financial data and earnings coverage published by Yahoo Finance.
Record Revenue and Adjusted Earnings Above Revised Outlook
Total revenue for the third quarter rose 34% year over year to $349.5 million. Adjusted EBITDA reached $100.1 million, and adjusted diluted earnings per share hit $1.68, beating the company’s revised outlook range. Operating income rebounded to $59.4 million, contrasting sharply with an operating loss of $116.5 million recorded during the same period a year earlier. Free cash flow climbed to $36.5 million from $25.7 million, aided by contract adjustments, tariff refunds, and a vendor credit.
President and CEO Gunnar Kleveland said the quarter marked a transition from resolving legacy operational hurdles toward capturing growth across commercial aerospace, defense, missiles, hypersonics, and next-generation aircraft programs.
“Our major programs are continuing to ramp, our execution continues to improve, the portfolio contains materially less program risk, and we’re winning new business.”
Kleveland stated during the earnings call.
Sikorsky Agreement Resolves Salt Lake City Plant Uncertainty
A central development in the third quarter was an agreement with Sikorsky to revise the economics of the CH-53K helicopter program. Acting CFO Sean Valashinas detailed that the renegotiated contract contributed approximately $12 million to revenue, $44 million to adjusted EBITDA, and added $33.4 million to gross profit.
The revised terms provide a stable foundation for Albany’s Salt Lake City manufacturing facility. In the prior-year period, the launch of a strategic review for the program had reduced revenue by about $46 million and operating profit by about $147 million. Gross profit for the recent quarter reached $140.4 million, or 40.2% of revenue, compared to a gross loss of $49.9 million a year earlier.
Engineered Composites Sets Segment Record
The Engineered Composites segment generated a record $179.7 million in revenue during the quarter, driven by higher production activity on LEAP engine components, Boeing platforms, missile programs, and helicopter applications. Segment adjusted EBITDA was $65.6 million, or 36.5% of sales, reversing a loss of $134.6 million in the prior-year period.
Excluding CH-53K-related impacts and other specified items, Valashinas noted that the underlying Engineered Composites EBITDA margin was approximately 12.5%. Management indicated that this 12.5% margin serves as a reasonable baseline for the fourth quarter and early 2027, with ambitions to exit 2027 with margins in the mid-teens through pricing gains and higher volumes.
Activity in missile programs, including JASSM and LRASM, also expanded. Albany secured a $21.2 million Industrial Base Analysis and Sustainment (IBAS) award to build out ceramic matrix composite capabilities, adding machining, inspection, and densification capacity with limited additional capital investment. Additionally, the company cited a teaming agreement with Lockheed Martin focused on hypersonic missile development.
Machine Clothing Maintains Stability Amid Regional Mixed Demand
Machine Clothing revenue stood at $169.8 million, showing a modest decline from the prior year. Management attributed the drop to customer consolidation, capacity rationalization in the Americas, and softer demand in South America. Stable conditions in Europe and four consecutive quarters of stabilization in China provided partial offsets, though visibility in China remains limited.
The segment generated $46.3 million in adjusted EBITDA, representing a 27.2% margin. While margins contracted slightly due to unfavorable regional mix and lower volume, cost discipline and operational execution preserved profitability. Albany expects full-year Machine Clothing revenue to run slightly lower than 2025 levels, while maintaining a plan to replace equipment affected by an earlier failure before the end of 2026.
Fourth-Quarter Guidance and Outlook
For the final quarter of the year, Albany maintained its consolidated revenue outlook of $325 million to $335 million, alongside expected adjusted diluted EPS of $0.65 to $0.75 and an effective tax rate of approximately 29.5%. Capital expenditures dropped to $12.2 million from $18.3 million due to facility optimization. The company ended the quarter with $79.1 million in cash and $422.1 million in total debt, leaving net debt at approximately $343 million and total available capital at roughly $457 million.
Management plans to outline updated long-term targets and a 2030 outlook during an upcoming Investor Day in New York City.
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