The headline EPS beat is entirely due to a one-time bargain purchase gain; strip that out and the underlying business is deteriorating sharply. Monitor the Q3 2026 earnings for evidence that the backlog growth is converting into revenue and margin recovery, and watch for integration risks from the aerospace acquisitions.
Price Chart
Executive Summary
Eastern Co. reported Q2 2026 GAAP EPS of $0.94, inflated by a $6.5M one-time bargain purchase gain from the Sungear/Crown Precision acquisition. Excluding that gain, adjusted EPS was $0.15, down 74% YoY from $0.57. Revenue fell 12% YoY to $61.8M, and adjusted EBITDA dropped 49% to $3.4M. While backlog surged 45% to $126.2M (aided by the acquisition), the underlying business continues to show declining revenue and profitability, making the headline EPS beat a non-recurring accounting artifact.
Key Financial Metrics
Key Facts
- Net sales decreased 12% YoY to $61.8M from $70.2M.
- GAAP net income from continuing operations was $5.6M ($0.94/diluted share), including a $6.5M non-cash bargain purchase gain.
- Adjusted net income (non-GAAP) was $0.9M ($0.15/diluted share), down 74% from $3.5M ($0.57) in Q2 2025.
- Adjusted EBITDA fell 49% to $3.4M from $6.7M.
- Backlog increased 45% YoY to $126.2M, driven by acquired aerospace orders and strengthening demand.
- Total debt increased by $8.8M to $41.7M to fund the Sungear and Crown Precision acquisitions.
- Company repurchased 19,529 shares in Q2; 256,275 shares remain under the buyback program.
Financial Impact
Revenue decline of $8.4M (-12% YoY); adjusted net income decline of $2.6M (-74% YoY); adjusted EBITDA decline of $3.3M (-49% YoY)
Risk Factors
- Underlying revenue and adjusted profitability continue to decline YoY despite acquisition contributions.
- Debt increased $8.8M to fund acquisitions, adding financial leverage and integration risk.
- The $6.5M bargain purchase gain is non-recurring; future quarters will not have this benefit.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001654954-26-007476 |
| Document: eml_8k.htm | 0001654954-26-007476 |
| Document: 0001654954-26-007476-index-headers.html | 0001654954-26-007476 |
| Document: 0001654954-26-007476-index.html | 0001654954-26-007476 |
| Document: 0001654954-26-007476.txt | 0001654954-26-007476 |
| 8-K Data (Synthetic) | 0001654954-26-007476 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 17, 2026 5w ago | Insider Cluster | $24.66 | awaiting T+60 | — | $24.13 (−2.15%) |
Aug 14, 2026 10w ago | Institutional Cluster | $25.11 | awaiting T+60 | — | $24.13 (+3.90%) |
Aug 11, 2026 10w ago | 8-K | $25.65 | awaiting T+60 | — | $24.13 (+5.93%) |
Jun 2, 2026 20w ago | 8-K | $21.54 $26.03 | ▲ +20.82% | ▲ +19.70% | $24.13 (+12.02%) |
May 12, 2026 23w ago | 8-K | $20.82 $24.90 | ▼ −19.60% | ▼ −15.16% | $24.13 (−15.90%) |
Mar 23, 2026 31w ago | DEFA14A | $20.64 $23.68 | ▲ +14.73% | ▲ +0.40% | $24.13 (+16.91%) |
Mar 16, 2026 32w ago | Insider Cluster | $20.53 $21.90 | ▲ +6.67% | ▼ −3.81% | $24.13 (+17.54%) |
Mar 9, 2026 33w ago | Insider Cluster | $19.15 $21.61 | ▲ +12.85% | ▲ +1.05% | $24.13 (+26.01%) |
Mar 6, 2026 33w ago | Insider Cluster | $18.54 $21.52 | ▲ +16.07% | ▲ +3.29% | $24.13 (+30.15%) |
US Market Status
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