Hillenbrand’s first quarter results were met with a negative market reaction, largely due to ongoing macroeconomic challenges and order delays stemming from increased tariffs. Management attributed the 8.8% year-over-year sales decline to a lower starting backlog and persistent uncertainty that discouraged customers from committing to new projects. CEO Kimberly Ryan pointed out, “As we entered the calendar year, we were cautiously optimistic that our strong project pipeline would begin converting to orders at a more normalized pace. Since then, however, we’ve seen tariffs expand and escalate significantly.”
Is now the time to buy HI? Find out in our full research report (it’s free).
Hillenbrand (HI) Q1 CY2025 Highlights:
- Revenue: $715.9 million vs analyst estimates of $691 million (8.8% year-on-year decline, 3.6% beat)
- Adjusted EPS: $0.60 vs analyst estimates of $0.54 (11.5% beat)
- Adjusted EBITDA: $98.8 million vs analyst estimates of $96.98 million (13.8% margin, 1.9% beat)
- The company dropped its revenue guidance for the full year to $2.59 billion at the midpoint from $2.71 billion, a 4.4% decrease
- Management lowered its full-year Adjusted EPS guidance to $2.28 at the midpoint, a 13.3% decrease
- EBITDA guidance for the full year is $379 million at the midpoint, below analyst estimates of $402.4 million
- Operating Margin: 8.5%, down from 10.6% in the same quarter last year
- Backlog: $1.65 billion at quarter end
- Market Capitalization: $1.41 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Hillenbrand’s Q1 Earnings Call
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Matt Summerville (D.A. Davidson) asked about order trends and cadence, especially in food, health, and nutrition. CFO Robert VanHimbergen explained that orders were steady through February, but larger deals were delayed due to tariff concerns, with some contracts put on hold but not canceled.
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Summerville (D.A. Davidson) followed up regarding synergy progress from recent acquisitions and potential future divestitures. CEO Kimberly Ryan emphasized that synergy targets are being met ahead of schedule and confirmed that the company continues to evaluate portfolio optimization opportunities.
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John Franzreb (Sidoti & Company) inquired about the effectiveness of tariff mitigation levers, particularly dual sourcing and surcharge pricing. VanHimbergen responded that dual sourcing offers the most immediate impact and that surcharge pricing is being selectively applied, especially where pricing power is stronger.
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Jeffrey Hammond (KeyBanc Capital Markets) questioned why Hillenbrand’s pricing actions in response to tariffs were more targeted than peers, and how inflationary pressures post-COVID compared. Ryan explained that the company’s regional supply strategy limits pricing flexibility, and that demand softness reduces pricing power, especially in the MTS segment.
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Dan Moore (CJS Securities) asked about the parts and service business’s resilience and the timing needed for a recovery in large project orders. VanHimbergen indicated that aftermarket activity remains steady, but a pickup in orders is needed by late Q2 or Q3 to support growth in the following year.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be focused on (1) tracking the pace of order recovery in food, health, and nutrition as macro uncertainty evolves, (2) assessing the realized impact of tariff mitigation strategies and cost controls on margins, and (3) monitoring the progress of ongoing portfolio optimization, including the closing of the TerraSource Global sale. The timing and scale of customer investment resumption will be a critical signal for future growth.
Hillenbrand currently trades at $20.03, down from $22.60 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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