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Why Columbus McKinnon (CMCO) Stock Is Down Today

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

CMCO Cover Image

What Happened?

Shares of material handling equipment manufacturer Columbus McKinnon (NASDAQ: CMCO) fell 14.4% in the afternoon session after the company reported a significant net loss for its fiscal first quarter and missed earnings per share expectations. The materials handling products maker posted a net loss of $1.9 million, or 7 cents per share, which was a sharp reversal from the net income of $8.6 million reported in the same period a year ago. The company's results were significantly impacted by several one-time and ongoing costs, including $8.1 million in expenses tied to its Kito Crosby acquisition, a $4.2 million negative impact from tariffs, and $2.5 million in business realignment costs. Even on an adjusted basis, earnings per share of $0.50 fell from $0.62 in the prior year. While the company’s revenue of $235.9 million came in ahead of expectations, the swing to a net loss appeared to weigh heavily on investor sentiment.

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What Is The Market Telling Us

Columbus McKinnon’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for Columbus McKinnon and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 41.9% on the news that the company reported weak third-quarter results, with revenue declining 7.9% y/y, missing expectations. 

Sluggish short-cycle demand and a struggling European market drove the decline, though price increases provided some cushion. In addition, gross margin slipped to 35.1% from 36.9% a year ago, while adjusted EBITDA fell 8.6%, missing Wall Street's forecasts. The weak growth and margins led to an earnings miss. Looking ahead, the company guided for a mid-single-digit percentage revenue decline for fiscal 2025, reflecting ongoing demand softness and policy uncertainty​. 

Overall, this quarter could have been better. Following the results, DA Davidson analyst downgraded the stock's rating from Buy to Neutral and assigned a price target of $35. 

Separately, the company announced the acquisition of Kito Crosby, a producer and manufacturer of products for lifting heavy loads, for $2.7 billion. The deal is expected to be funded with $2.6 billion in committed debt financing and a $0.8 billion perpetual convertible preferred equity investment from CD&R. This could raise additional concerns about the company's debt profile and ability to manage interest payments given its weak growth.

Columbus McKinnon is down 59.8% since the beginning of the year, and at $14.85 per share, it is trading 63.4% below its 52-week high of $40.59 from December 2024. Investors who bought $1,000 worth of Columbus McKinnon’s shares 5 years ago would now be looking at an investment worth $447.95.

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