Investing
Modine (MOD) stock falls 21.4% as quarterly profit drops
Modine stock fell 21.4% on November 4, 2026 after quarterly net earnings dropped 32% despite a 35% sales jump and a 160 basis point gross margin decline.
Modine (NYSE: MOD) stock was down 21.4% in afternoon trading on November 4, 2026, the day after the thermal management company reported second quarter fiscal 2027 results. Net earnings for the quarter ended September 30, 2026 fell 32% to $30.3 million, even though net sales rose 35%.
What Modine reported
| Metric | This period | A year earlier | Change |
|---|---|---|---|
| Net sales | $994.4M | $738.9M | +35% |
| Net earnings | $30.3M | $44.8M | -32% |
| Earnings per share | $0.56 | $0.83 | -33% |
| Adjusted EPS | $1.35 | $1.06 | +27% |
| Adjusted EBITDA | $136.2M | $103.8M | +31% |
The profit drop was largely a tax item. Modine booked $29.5 million of income tax expense tied to restructuring its legal entities ahead of the spin-off of its Performance Technologies business, which was completed on October 1. Adjusted EPS (profit per share excluding restructuring, spin-off costs and certain other items) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, minus one-off items) both rose.
Margins narrowed. Gross margin fell 160 basis points (1.6 percentage points) to 20.7%. In the Data Centers segment, sales rose 95% to $439.7 million but gross margin dropped 470 basis points to 19.7%, which the company blamed on higher material, component and tariff costs. Full-year guidance (the company's own forecast) for the business without Performance Technologies is net sales of $3.1 to $3.2 billion and adjusted EBITDA of $470 to $500 million.
Why the stock fell 21.4%
The drop was about 8.6 times a typical day's swing for the stock, and it came while the broader market rose about 1.8%. The most plausible triggers in the release were the shrinking margins, led by the Data Centers squeeze, and cash: free cash flow for the six months was a use of $145.6 million as Modine spent on factory capacity and built up inventory.
What to watch next
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Longer-term revenue and earnings targets at the Analyst and Investor Day on November 18.
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The third quarter, the first to report Performance Technologies as discontinued operations.
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Whether long-term supplier agreements help Data Centers margins against material and tariff costs.
FAQ
How much debt does Modine have?
Net debt was $573.7 million at September 30, 2026, up $210.9 million from the end of fiscal 2026, with total debt of $724.3 million and cash of $150.6 million.
How did Modine's Commercial HVAC business do?
Commercial HVAC sales rose 23% to $285.5 million, while its gross margin fell 140 basis points to 23.1% on unfavorable sales mix and higher material and tariff costs.
Sources
This article is for information only and is not investment advice.