The global chemical industry might be in a prolonged slump, but it seems no one bothered to tell Hawkins.
The diversified chemical company posted a growth-packed quarterly earnings report that convincingly beat analysts. Obviously pleased by this, investors bid the company’s stock up by almost 14% on Tuesday, trouncing the 0.6% gain of the benchmark S&P 500 index.
Downcycle? What downcycle?
Hawkins notched a new record for revenue in its second quarter of fiscal 2027. This was just under $314 million, for a robust year-over-year increase of 12%. Its growth was broad, with all three reporting segments — water treatment, industrial solutions, and food and health sciences — delivering improvements. Water treatment saw an increase of 16%, followed by 10% for industrial solutions and 5% for food and health sciences.
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Hawkins notched another second-quarter record with headline earnings per share (EPS). Its net income was just under $27.8 million, for EPS of $1.34, representing growth of nearly 23%.
Compounding the all-time highs, both fundamentals topped the consensus analyst estimates. Collectively, prognosticators following Hawkins were estimating less than $303 million on the top line, and EPS of only $1.19.
Higher volumes helped boost revenue across all three business units, aided in some instances by price hikes. On a slightly down note, food and health sciences was dinged by a sales slump in agricultural products.
HWKN Hawkins
$153.85+$18.41 (+13.59%)
NASDAQ · As of 4:00 PM ET 10/27/26
A unique operator
What’s probably more encouraging about Hawkins’ performance during the industry slump is its shareholder-pleasing moves and its balance-sheet cleanup. The company didn’t hesitate to mention that it retired $15 million of debt and repurchased $12 million of its own stock during the quarter.
Market players notice when a company can buck a trend and do well while peers struggle. Hawkins has a unique mix of businesses that are clearly resistant to the stiff headwinds buffeting the chemical industry, and it has a habit of bulking up with bolt-on acquisitions. Tuesday’s pop makes it a bit pricey on valuations, however, so I’d keep an eye on the company’s organic growth to judge how its legacy business is performing.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.