0000037785-26-000096
SEC filingA challenging quarter defined by significant margin compression and a deepening net loss, driven by competitive pricing pressure and higher costs from tariffs and raw materials, though partially offset by volume growth in Europe, Middle East, Africa, and North America.
Profitability metrics faced significant pressure during the quarter. Gross profit fell 22.1% to $246.6 million, resulting in a gross margin of 32.5%. Management attributed the decrease in gross margin percentage primarily to competitive pricing pressure and higher costs stemming from tariffs and unfavorable raw material costs; however, volume improvement during the period provided a partial offset. Operating income swung to a loss of $81.0 million, compared to income of $58.2 million in the prior year, resulting in an operating margin of -10.7%. The net loss widened substantially to $281.3 million, or a diluted loss per share of $2.25, compared to a net loss of $15.5 million, or $0.12 per share, in the first quarter of 2025. The company noted that spending on research and development decreased due to the timing of project expenses and continued cost reduction efforts connected to restructuring activities.