The Gorman-Rupp Company (NYSE:GRC)reported fourth-quarter earnings that topped analyst estimates, as a surge in demand from the data center market helped the pump manufacturer overcome a slowdown in municipal projects.
The Mansfield, Ohio-based company saw net sales grow 2.4% to $166.6 million, led by gains in its fire suppression, industrial, and OEM segments.
Management attributed much of this strength to infrastructure needs for the booming data center sector.
These gains were partially offset by a $4 million dip in the municipal market, which the company blamed on the specific timing of wastewater and flood control projects.
Profitability showed a marked improvement, with net income rising to $13.7 million, or $0.52 per share, up from $11 million a year ago.
On an adjusted basis, earnings of $0.55 per share beat the average analyst consensus of $0.43.
Meanwhile, gross margins expanded by 120 basis points to 31.4%, supported by better labor leverage and the absence of high healthcare costs that had weighed on the prior year's results.
The company also made progress on its balance sheet, reducing interest expenses to $5.4 million as it paid down outstanding debt.