Federal Signal (NYSE:FSS) Announces Quarterly Earnings Results, Beats Estimates By $0.13 EPS

Federal Signal (NYSE:FSS) issued its quarterly earnings data on Thursday. The conglomerate reported $1.42 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.29 by $0.13, Briefing.com reports. The firm had revenue of $670.20 million during the quarter, compared to analysts’ expectations of $667.04 million. Federal Signal had a return on equity of 21.18% and a net margin of 11.56%.Federal Signal’s revenue was up 18.7% on a year-over-year basis. During the same period in the previous year, the firm posted $1.17 earnings per share. Federal Signal updated its FY 2026 guidance to 5.120-5.300 EPS.

Here are the key takeaways from Federal Signal’s conference call:

• Record second-quarter results: Net sales rose 19% year over year to $670 million, while adjusted EBITDA increased 22% to $144.4 million and adjusted EPS grew 21% to $1.42. Orders increased 18% to $637 million, supported by broad-based demand.
• Federal Signal raised its 2026 adjusted EPS outlook to $5.12–$5.30 from $4.80–$5.05 and increased its revenue outlook to $2.58–$2.67 billion. Management cited strong second-quarter execution, backlog, aftermarket momentum, and acquisition performance.
• Environmental Solutions Group sales grew 20% and adjusted EBITDA rose 25%, with aftermarket revenue up 24% to roughly 25% of ESG revenue. Management expects continued aftermarket expansion through parts manufacturing, additional service locations, rentals, used equipment, and acquisition-related opportunities.
• New Way and Mega are performing ahead of internal profit and margin expectations, with New Way tracking ahead of its cost-synergy targets. The company also completed the small Western Technology acquisition and described an active M&A pipeline across both operating groups.
• Backlog was approximately $1 billion, down 8% year over year largely because third-party Labrie refuse orders are being phased out, but management said backlog-driven products still provide strong forward visibility. Safety and Security Systems’ adjusted EBITDA margin declined to 25.1% from 26.9% because of product and shipment mix, though it remained within the company’s 22%–28% target range.

Federal Signal Stock Up 11.2%

Federal Signal stock traded up $12.57 during trading on Thursday, reaching $124.43. 901,435 shares of the company’s stock were exchanged, compared to its average volume of 491,500. Federal Signal has a 52-week low of $101.18 and a 52-week high of $134.51. The company’s 50-day moving average is $116.67 and its two-hundred day moving average is $114.76. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.29 and a current ratio of 2.84. The firm has a market cap of $7.59 billion, a price-to-earnings ratio of 28.28, a PEG ratio of 1.70 and a beta of 1.23.

Federal Signal Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, August 27th. Investors of record on Friday, August 14th will be issued a dividend of $0.15 per share. The ex-dividend date is Friday, August 14th. This represents a $0.60 annualized dividend and a dividend yield of 0.5%. Federal Signal’s payout ratio is presently 13.64%.

Wall Street Analyst Weigh In

FSS has been the topic of a number of research reports. Zacks Research raised shares of Federal Signal from a “hold” rating to a “strong-buy” rating in a research note on Monday, May 4th. DA Davidson upped their price target on shares of Federal Signal from $125.00 to $132.00 and gave the company a “neutral” rating in a report on Friday, May 1st. Weiss Ratings raised shares of Federal Signal from a “buy (b-)” rating to a “buy (b)” rating in a research note on Tuesday, June 23rd. Wall Street Zen raised Federal Signal from a “hold” rating to a “buy” rating in a research note on Saturday, May 2nd. Finally, KeyCorp reiterated an “overweight” rating and set a $140.00 target price on shares of Federal Signal in a report on Thursday, April 30th. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of “Buy” and a consensus price target of $139.25.

Institutional Trading of Federal Signal

Several large investors have recently bought and sold shares of the company. Invesco Ltd. increased its stake in Federal Signal by 10.2% during the 4th quarter. Invesco Ltd. now owns 2,168,788 shares of the conglomerate’s stock worth $235,509,000 after buying an additional 201,440 shares during the period. Mercer Global Advisors Inc. ADV boosted its holdings in Federal Signal by 33.9% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 2,565 shares of the conglomerate’s stock valued at $279,000 after purchasing an additional 649 shares during the last quarter. XTX Topco Ltd grew its stake in Federal Signal by 15.8% during the 4th quarter. XTX Topco Ltd now owns 4,174 shares of the conglomerate’s stock valued at $453,000 after purchasing an additional 570 shares in the last quarter. Voloridge Investment Management LLC increased its holdings in Federal Signal by 10.5% during the 4th quarter. Voloridge Investment Management LLC now owns 171,218 shares of the conglomerate’s stock worth $18,593,000 after purchasing an additional 16,204 shares during the last quarter. Finally, Tudor Investment Corp ET AL boosted its stake in shares of Federal Signal by 21.3% during the 4th quarter. Tudor Investment Corp ET AL now owns 321,830 shares of the conglomerate’s stock valued at $34,948,000 after buying an additional 56,522 shares during the last quarter. Institutional investors and hedge funds own 92.73% of the company’s stock.

About Federal Signal

Federal Signal Corporation (NYSE: FSS), headquartered in Oak Brook, Illinois, is a diversified industrial company that designs, manufactures and markets a broad range of products and services for municipal, commercial and industrial customers worldwide. Founded in 1901 in Chicago, the company has grown through a combination of organic investment and strategic acquisitions to become a leading provider of environmental management and safety and security solutions.

Federal Signal operates through two primary business segments.