Frequency Electronics (NASDAQ:FEIM) Posts Earnings Results, Beats Expectations By $0.26 EPS

Frequency Electronics (NASDAQ:FEIM) issued its earnings results on Thursday. The communications equipment provider reported $0.41 earnings per share for the quarter, topping the consensus estimate of $0.15 by $0.26, FiscalAI reports. Frequency Electronics had a return on equity of 4.59% and a net margin of 3.68%.The business had revenue of $23.45 million for the quarter, compared to analyst estimates of $17.85 million.

Here are the key takeaways from Frequency Electronics’ conference call:

• Record first-quarter performance: Revenue reached $23.5 million, up 70% year over year, while net income rose to $4.2 million, or $0.41 per share, from $634,000 a year earlier. Gross margin improved to 45.8% and operating margin to 22%.
• Backlog and outlook strengthened: Fully funded backlog reached a record $129 million, up 82% year over year, with approximately 65% expected to convert within the next 12 months. Management said the results increase confidence in meeting or exceeding its $150 million fiscal 2029 revenue target.
• Defense and space demand remains robust: Growth is being supported by satellite programs, proliferated LEO constellations, Patriot and THAAD-related work, missile programs, and a secured communications contract for more than 1,000 systems. One customer is seeking to increase monthly production by over 50% and has indicated potential follow-on orders.
• Capital raise supports expansion: The company raised approximately $73 million through a secondary offering, including the subsequent greenshoe exercise, while remaining debt-free. Management plans to use the proceeds for capacity expansion, which could accelerate growth beyond its current fiscal 2029 target and is expected to be primarily organic.
• Execution capacity is a key constraint: FEI said ramping production to meet customer demand is one of its biggest challenges and that it is declining overly optimistic delivery schedules in some cases. Management also cautioned that margin improvement is unlikely to follow a perfectly straight line as production scales.

Frequency Electronics Trading Up 42.4%

Shares of FEIM stock opened at $88.38 on Friday. The company’s fifty day simple moving average is $66.01 and its 200-day simple moving average is $60.82. Frequency Electronics has a 52 week low of $26.05 and a 52 week high of $89.76. The company has a market cap of $988.09 million, a PE ratio of 353.52 and a beta of 0.72.

Frequency Electronics News Summary

Here are the key news stories impacting Frequency Electronics this week:

• Positive Sentiment: Record revenue and earnings beat: Fiscal Q1 revenue rose 70% year over year and 52% sequentially to a record $23.5 million, exceeding analyst expectations of approximately $17.9 million. Adjusted earnings of $0.41 per share surpassed the $0.15 consensus estimate. Frequency Electronics fiscal 2027 first-quarter results
• Positive Sentiment: Visibility from a growing backlog: Funded backlog reached a record $129 million, up 82% year over year and 16% sequentially. This supports expectations for continued revenue growth in the communications and aerospace markets. Frequency Electronics financial results announcement
• Positive Sentiment: Strong operating leverage and expansion plans: Management reported an operating margin above 22% and indicated that capacity expansion, funded in part by a $73 million equity raise, could accelerate progress toward its $150 million-plus fiscal 2029 revenue target. The prospect of pulling forward that target is supporting investor optimism. Frequency Electronics capacity expansion update
• Neutral Sentiment: The earnings call reinforced the company’s growth outlook, but investors will be watching whether Frequency Electronics can convert its backlog into sustained revenue and profitability as production capacity expands. Frequency Electronics Q1 2027 earnings call transcript
• Negative Sentiment: Despite the earnings beat, the company still reported a negative net margin of 1.43% and negative return on equity of 1.56%. The equity financing also creates potential shareholder dilution, although management expects the investment to support higher future growth.

Institutional Trading of Frequency Electronics

Large investors have recently added to or reduced their stakes in the stock. Kestra Advisory Services LLC purchased a new position in Frequency Electronics in the fourth quarter valued at about $27,000. Informed Momentum Co LLC boosted its position in shares of Frequency Electronics by 1.2% in the fourth quarter. Informed Momentum Co LLC now owns 47,007 shares of the communications equipment provider’s stock worth $2,531,000 after buying an additional 541 shares during the period. First Trust Advisors LP boosted its position in shares of Frequency Electronics by 2.7% in the fourth quarter. First Trust Advisors LP now owns 21,628 shares of the communications equipment provider’s stock worth $1,164,000 after buying an additional 569 shares during the period. Police & Firemen s Retirement System of New Jersey grew its stake in shares of Frequency Electronics by 52.2% in the fourth quarter. Police & Firemen s Retirement System of New Jersey now owns 2,010 shares of the communications equipment provider’s stock valued at $108,000 after buying an additional 689 shares in the last quarter. Finally, New York State Common Retirement Fund grew its stake in shares of Frequency Electronics by 63.6% in the fourth quarter. New York State Common Retirement Fund now owns 1,800 shares of the communications equipment provider’s stock valued at $97,000 after buying an additional 700 shares in the last quarter. 58.60% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on FEIM shares. Weiss Ratings lowered Frequency Electronics from a “hold (c)” rating to a “hold (c-)” rating in a research note on Wednesday, September 2nd. Wall Street Zen upgraded Frequency Electronics from a “sell” rating to a “hold” rating in a report on Saturday. One equities research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and one has assigned a Hold rating to the company’s stock. According to MarketBeat, Frequency Electronics currently has an average rating of “Buy” and an average target price of $43.67.

Frequency Electronics Company Profile

Frequency Electronics, Inc (NASDAQ:FEIM) is a U.S.-based designer and manufacturer of precision frequency control products and timing solutions. The company’s portfolio includes oven-controlled crystal oscillators (OCXOs), atomic frequency standards such as rubidium oscillators, GPS-disciplined oscillators (GPSDOs), microwave synthesizers, and integrated timing subsystems. These products are used to provide stable and accurate frequency and time references for applications that demand high performance and reliability.

FEI serves a broad range of markets, including telecommunications, aerospace and defense, satellite and space systems, test and measurement equipment, and critical infrastructure.