Materion Raises Outlook as Earnings Hit Record
Second-quarter sales reached $613.9 million, rising 42% from a year earlier.
Materion Corp. (MTRN), a maker of advanced materials for high-performance industries, reported record adjusted earnings of $1.90 a share as higher volume, price and product mix lifted second-quarter profitability.
The quarter marked a turn from the lower-volume conditions Materion reported through much of 2024. Value-added sales rose 15% year over year to a record $308.2 million, accelerating from 1% growth in the first quarter, while a record backlog stood about 30% above a year earlier and 20% above the start of 2025.
Net sales increased from $431.7 million a year earlier and rose 12% sequentially. Net income climbed 55% to $38.8 million, and diluted earnings increased to $1.84 a share from $1.21. Adjusted earnings rose 39% and increased 50% from the first quarter.
The gap between net-sales growth and value-added-sales growth reflected higher pass-through metal costs, which increased to $305.7 million from $162.7 million. Even so, operating profit rose 41% to $51.7 million, and adjusted EBITDA increased 29% to a record $71.8 million. Adjusted EBITDA margin on value-added sales widened 2.5 percentage points to 23.3%.
Electronic Materials provided the strongest margin expansion. Its value-added sales increased 15% to $87.4 million, while adjusted EBITDA jumped 57% to $28.0 million and margin widened 8.6 percentage points to 32.0%. Performance Materials value-added sales rose 13% to $190.0 million, with adjusted EBITDA up 16% to $48.3 million.
Precision Optics extended its turnaround, with adjusted EBITDA tripling to $6.6 million after the company reported five consecutive quarters of bottom-line improvement in the first quarter. Materion also disclosed an approximately $15 million award to supply engine-performance materials to a large commercial-space customer.
Materion raised its full-year adjusted earnings guidance to $6.80 to $7.20 a share from $6.00 to $6.50, lifting the midpoint 12%. The company now expects mid-teens top-line growth, compared with its previous forecast for low-double-digit growth.
Free cash flow rose 64% to $58.7 million and reached 151% of net income. Special items declined to $0.6 million, though first-half results included $3.5 million tied to the precision-clad-strip quality issue identified in late 2024.