Northwest Pipe's first quarter results were met with a negative market reaction, as the company delivered higher-than-expected revenue but missed Wall Street's non-GAAP profit expectations. Management attributed the underperformance to a combination of severe weather disruptions and the introduction of new trade policies that led to shipment delays and additional costs, particularly in the Steel Pressure Pipe (SPP) segment. CEO Scott Montross acknowledged these challenges, noting, “This first quarter may have been a little bit heavier with weather events,” and emphasized that new tariffs also led to a temporary loss of revenue and margin. Despite these headwinds, the company saw strong operational execution in its precast business, especially on the residential side.
Is now the time to buy NWPX? Find out in our full research report (it’s free).
Northwest Pipe (NWPX) Q1 CY2025 Highlights:
- Revenue: $116.1 million vs analyst estimates of $111.9 million (2.6% year-on-year growth, 3.7% beat)
- Adjusted EBITDA: $10.12 million vs analyst estimates of $13.2 million (8.7% margin, 23.3% miss)
- Operating Margin: 4.8%, down from 7.7% in the same quarter last year
- Market Capitalization: $396.1 million
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 Northwest Pipe’s Q1 Earnings Call
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Brent Thielman (D.A. Davidson) asked CEO Scott Montross for details on the impact of tariffs and how the company plans to move beyond these challenges. Montross explained that shifting orders across facilities and passing costs to customers should limit future disruptions.
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Brent Thielman (D.A. Davidson) followed up on the outlook for precast revenue in the second half of the year, questioning the conservative guidance. Montross said conservatism was warranted due to long-range uncertainties but noted potential upside if current trends continue.
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Brent Thielman (D.A. Davidson) requested clarification on elevated SG&A expenses. CFO Aaron Wilkins attributed this to seasonal compensation accruals and projected that expense levels would normalize over the rest of the year.
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Julio Romero (Sidoti) asked about the rebound in non-residential precast shipments and remaining customer uncertainty. Montross confirmed that April saw improved order activity, with customers adjusting to new trade and macroeconomic conditions.
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Ted Jackson (Northland Securities) inquired whether higher steel prices from new tariffs could dampen project demand. Montross stated that current steel price levels are not expected to reduce demand and may even benefit project pricing and gross profit dollars.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the pace at which SPP backlog is converted into revenue and whether margin improvement materializes as tariff impacts are managed, (2) the sustainability of strong residential precast demand alongside the recovery in non-residential orders, and (3) progress on acquisition activity in the precast space. Execution on cost containment and the roll-out of new product capabilities will also be key areas of focus.
Northwest Pipe currently trades at $40.10, down from $42.29 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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