Mueller Water Products’ first quarter results came in above Wall Street’s revenue and profit expectations, yet the market responded negatively. Management attributed the performance to higher order volumes, particularly in repair products, and ongoing gains from operational efficiency initiatives. CEO Martie Zakas cited a sequential increase in net sales of repair products and emphasized the company’s efforts to maintain strong customer service and cost discipline amid a challenging external environment. Pricing actions and supply chain management helped offset some manufacturing inefficiencies, but newly enacted tariffs have already begun to pressure costs.
Is now the time to buy MWA? Find out in our full research report (it’s free).
Mueller Water Products (MWA) Q1 CY2025 Highlights:
- Revenue: $364.3 million vs analyst estimates of $354 million (3.1% year-on-year growth, 2.9% beat)
- Adjusted EPS: $0.34 vs analyst estimates of $0.31 (9.7% beat)
- Adjusted EBITDA: $84.5 million vs analyst estimates of $80.57 million (23.2% margin, 4.9% beat)
- The company lifted its revenue guidance for the full year to $1.4 billion at the midpoint from $1.38 billion, a 1.1% increase
- EBITDA guidance for the full year is $312.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 19.2%, up from 18% in the same quarter last year
- Organic Revenue rose 3.1% year on year (6.2% in the same quarter last year)
- Market Capitalization: $3.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Mueller Water Products’s Q1 Earnings Call
- Deane Dray (RBC Capital Markets) asked about the possibility of pre-buying by distributors to get ahead of tariffs. President Paul McAndrew replied that while the company monitors this closely, no significant pre-buying was observed this quarter.
- Nick Giovanni (Goldman Sachs) pressed for details on capital expenditure needs now that the new foundry is operational. McAndrew said ongoing investments will focus on maintaining and improving core foundries, keeping capex at 3–4% of sales.
- Nick Giovanni (Goldman Sachs) also inquired about whether customers are delaying projects due to tariff uncertainty. CEO Martie Zakas responded that municipal demand has remained resilient, though residential construction faces more uncertainty later in the year.
- Unidentified Analyst (Baird) questioned whether price increases would fully offset tariff costs. Zakas clarified that price hikes are targeted and intended to partially mitigate tariff impact, with additional supply chain and operational actions necessary for full mitigation.
- Walter Liptak (Seaport Research) asked if double-digit price increases could delay municipal projects. McAndrew said repair product price increases would not affect project timing, as these are typically fast-turn items not tied to long-term municipal projects.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace at which tariff mitigation measures—including pricing, supply chain shifts, and supplier cost-sharing—translate to improved margins, (2) the stabilization and growth of repair product sales as supply chain disruptions ease, and (3) signals of sustained municipal market resilience amid inflation and construction seasonality. Progress on acquisition opportunities and further efficiency gains will also be important markers.
Mueller Water Products currently trades at $24.80, down from $27.06 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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