Industrial technology solutions provider EnPro Industries (NYSE: NPO) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 6% year on year to $288.1 million. On the other hand, the company’s full-year revenue guidance of $0.06 at the midpoint came in 100% below analysts’ estimates. Its non-GAAP profit of $2.03 per share was 3.2% below analysts’ consensus estimates.

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“Enpro delivered another strong quarter of sales growth driven by a double-digit revenue increase in AST and continued momentum in Sealing Technologies," said Eric Vaillancourt, President and Chief Executive Officer.

Company Overview

Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Enpro struggled to consistently increase demand as its $1.08 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of lacking business quality.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Enpro’s annualized revenue declines of 1.4% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk.

This quarter, Enpro reported year-on-year revenue growth of 6%, and its $288.1 million of revenue exceeded Wall Street’s estimates by 1.9%.

Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months. Although this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Enpro has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12.6%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Enpro’s operating margin rose by 7.7 percentage points over the last five years, showing its efficiency has meaningfully improved.

This quarter, Enpro generated an operating margin profit margin of 15.9%, down 1.8 percentage points year on year. Since Enpro’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Enpro’s EPS grew at an astounding 20.4% compounded annual growth rate over the last five years, higher than its flat revenue. This tells us management responded to softer demand by adapting its cost structure.

Diving into Enpro’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Enpro’s operating margin declined this quarter but expanded by 7.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Enpro, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.

In Q2, Enpro reported adjusted EPS at $2.03, down from $2.08 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Enpro’s full-year EPS of $7.24 to grow 8.9%.

Key Takeaways from Enpro’s Q2 Results

It was great to see Enpro’s full-year EBITDA guidance top analysts’ expectations. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed and its EBITDA fell short of Wall Street’s estimates. Overall, this quarter was mixed. The stock remained flat at $214.88 immediately after reporting.

The latest quarter from Enpro’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.