Speciality material and gas containment company Luxfer (NYSE: LXFR) met Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 6.5% year on year to $92.9 million. Its GAAP profit of $0.10 per share was 54.5% below analysts’ consensus estimates.

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Company Overview

With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE: LXFR) offers specialized materials, components, and gas containment devices to various industries.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Luxfer’s sales grew at a sluggish 3.9% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a poor baseline for our analysis.

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. Luxfer’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.5% annually.

This quarter, Luxfer reported a rather uninspiring 6.5% year-on-year revenue decline to $92.9 million of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

Luxfer has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 9.2%, higher than the broader industrials sector.

Looking at the trend in its profitability, Luxfer’s operating margin decreased by 4.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q3, Luxfer generated an operating margin profit margin of 5.8%, down 4.5 percentage points year on year. Since Luxfer’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

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Luxfer’s EPS grew at an unimpressive 7.5% compounded annual growth rate over the last five years. This performance was better than its flat revenue but doesn’t tell us much about its business quality because its operating margin didn’t improve.

Diving into the nuances of Luxfer’s earnings can give us a better understanding of its performance. A five-year view shows that Luxfer has repurchased its stock, shrinking its share count by 3.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Luxfer, its two-year annual EPS growth of 19.7% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q3, Luxfer reported EPS of $0.10, down from $0.47 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Luxfer’s full-year EPS of $0.53 to grow 90.6%.

Key Takeaways from Luxfer’s Q3 Results

Revenue was just in line but Luxfer beat analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 2.7% to $13.60 immediately following the results.

So do we think Luxfer is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.