Gates Industrial (NYSE:GTES) Announces Quarterly Earnings Results

Gates Industrial (NYSE:GTES) released its earnings results on Friday. The company reported $0.35 earnings per share for the quarter, topping the consensus estimate of $0.32 by $0.03, Briefing.com reports. The company had revenue of $851.10 million for the quarter, compared to the consensus estimate of $859.72 million. Gates Industrial had a net margin of 7.30% and a return on equity of 10.36%. Gates Industrial’s revenue was up .4% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.36 EPS. Gates Industrial updated its FY 2026 guidance to 1.520-1.680 EPS.

Here are the key takeaways from Gates Industrial’s conference call:

• ERP transition in Europe caused distribution inefficiencies and above‑normal operating costs, representing about a 600‑basis‑point headwind to core sales and roughly a $0.07 drag on adjusted EPS, though management says Europe stabilized and further improvement is expected in Q2.
• Reported Q1 sales of $851 million and Adjusted EBITDA of $177 million (20.8% margin) with Adjusted EPS $0.35; the company delivered ~101% free cash flow conversion, reduced net leverage to 1.9x, and received a Moody’s upgrade to Baa2.
• Management reiterated full‑year 2026 guidance and guided Q2 revenue of $905–$945 million (midpoint ≈ 3.5% core growth), expecting temporary margin pressure in Q2 from ERP and footprint actions but forecasting an Adjusted EBITDA margin approaching ~23.5% in H2.
• Announced an opportunistic tuck‑in acquisition of Timken’s industrial belt business (management cited ~ $5 million/month potential revenue), which should be accretive, help consolidate the market, and the company remains open to further M&A.

Gates Industrial Stock Performance

Shares of GTES stock traded down $1.51 during trading hours on Friday, hitting $24.10. The company’s stock had a trading volume of 4,461,676 shares, compared to its average volume of 1,904,514. The company has a 50 day moving average of $24.57 and a 200 day moving average of $23.75. The stock has a market cap of $6.14 billion, a PE ratio of 24.84 and a beta of 1.28. The company has a current ratio of 3.37, a quick ratio of 2.42 and a debt-to-equity ratio of 0.61. Gates Industrial has a 12-month low of $19.26 and a 12-month high of $28.47.

Institutional Trading of Gates Industrial

Several large investors have recently made changes to their positions in the business. Dimensional Fund Advisors LP boosted its holdings in shares of Gates Industrial by 3.7% in the 4th quarter. Dimensional Fund Advisors LP now owns 11,250,875 shares of the company’s stock valued at $241,562,000 after acquiring an additional 400,359 shares during the last quarter. JPMorgan Chase & Co. boosted its holdings in shares of Gates Industrial by 98.7% in the 4th quarter. JPMorgan Chase & Co. now owns 8,373,294 shares of the company’s stock valued at $179,775,000 after acquiring an additional 4,158,341 shares during the last quarter. Invesco Ltd. boosted its holdings in shares of Gates Industrial by 5.9% in the 4th quarter. Invesco Ltd. now owns 8,322,654 shares of the company’s stock valued at $178,687,000 after acquiring an additional 461,160 shares during the last quarter. State Street Corp boosted its holdings in shares of Gates Industrial by 3.0% in the 4th quarter. State Street Corp now owns 7,971,572 shares of the company’s stock valued at $171,150,000 after acquiring an additional 232,447 shares during the last quarter. Finally, Channing Capital Management LLC boosted its holdings in shares of Gates Industrial by 15.6% in the 4th quarter. Channing Capital Management LLC now owns 4,166,611 shares of the company’s stock valued at $89,457,000 after acquiring an additional 560,833 shares during the last quarter. 98.50% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about Gates Industrial

Here are the key news stories impacting Gates Industrial this week:

• Positive Sentiment: Acquisition announced — Gates agreed to buy The Timken Company’s belts business, expanding its power-transmission footprint and management says the deal should improve adjusted EBITDA margins in the Industrial Motion segment. The strategic fit and expected margin accretion are positive for medium-term profit growth. Timken to Sell Belts Business to Gates
• Positive Sentiment: EPS beat — Gates reported $0.35 EPS for Q1, above the ~$0.32 consensus, showing underlying profitability and providing some support despite revenue pressure. That beat helps justify the multiple while investors assess topline trends. Gates Industrial (GTES) Q1 Earnings Surpass Estimates
• Neutral Sentiment: Guidance roughly in line but cautious on revenue — FY‑2026 EPS was guided to $1.52–$1.68 (near Street expectations) while revenue guidance of $3.5–$3.6B sits slightly below consensus. That keeps the story intact but raises questions about near-term top-line momentum. Gates Industrial Reports First-Quarter 2026 Results
• Neutral Sentiment: Conference call / management commentary — The earnings call transcript provides more context on reasons for core revenue weakness and integration plans for the Timken belts assets; investors should watch execution details. Gates Industrial (GTES) Q1 2026 Earnings Call Transcript
• Negative Sentiment: Top-line softness and core revenue decline — Q1 net sales were $851.1M (up 0.4% YoY) but core revenue fell ~2.9% year-over-year and sales missed analyst estimates (~$859.7M). Sluggish organic growth and the revenue miss likely drove the negative stock reaction. Gates Industrial (GTES) Q1 Earnings: How Key Metrics Compare to Wall Street Estimates

Analyst Ratings Changes

Several analysts have weighed in on the stock. Royal Bank Of Canada reissued an “outperform” rating and set a $31.00 target price on shares of Gates Industrial in a research report on Friday, February 13th. Morgan Stanley boosted their target price on shares of Gates Industrial from $25.00 to $27.00 and gave the stock an “equal weight” rating in a research report on Wednesday, March 11th. Citigroup boosted their target price on shares of Gates Industrial from $27.00 to $33.00 and gave the stock a “buy” rating in a research report on Friday, February 13th. Barclays dropped their target price on shares of Gates Industrial from $32.00 to $28.00 and set an “overweight” rating on the stock in a research report on Wednesday, April 1st. Finally, Robert W. Baird set a $39.00 target price on shares of Gates Industrial in a research report on Friday, February 13th. Six analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $30.36.

About Gates Industrial

Gates Industrial Corporation PLC (NYSE: GTES) is a leading global manufacturer of engineered power transmission belts and fluid power products. The company’s portfolio includes synchronous belts, V-belts, hose assemblies, fittings and hydraulic components designed to support a wide range of industrial and automotive applications. Gates Industrial serves sectors such as agriculture, mining, construction, manufacturing, transportation and consumer markets, offering solutions that improve performance, reliability and efficiency in demanding operating environments.

In its power transmission segment, Gates Industrial produces high-strength belts engineered for precise motion control and minimal maintenance.