Transcat Inc. (TRNS), a leading provider of calibration services and distribution products, saw its shares plummet 6.1% in pre-market trading on Wednesday after reporting disappointing third-quarter results for fiscal 2025. The company missed analysts' estimates for revenue and earnings due to several factors, including extended holiday closures at customer sites and softness in its Nexa Solutions channel.

For the third quarter, Transcat reported revenue of $66.8 million, up 2.4% year-over-year but below analysts' expectations. Net income came in at $2.36 million, a 30% decrease from the same period last year, while earnings per share (EPS) of $0.26 missed estimates by 22%.

During the earnings call, Transcat's management attributed the revenue and earnings miss to a decline in organic service revenue, primarily driven by softness in the Nexa Solutions channel, which offers a suite of services complementary to the company's core calibration business. Additionally, extended holiday closures at customer sites in December led to a significant reduction in incoming calibration service work, negatively impacting service revenue for the quarter.

However, the company remained optimistic about its long-term prospects, citing a strong pipeline of new opportunities and plans to improve execution in the solutions business. Transcat's recent acquisition of Martin Calibration, a leading provider of calibration services in the Midwest and West Coast, is expected to drive future growth and operational synergies.

Looking ahead, Transcat expects a rebound in the fourth quarter and fiscal 2026, with management forecasting a return to more historical levels of organic service growth. The integration of Martin Calibration and the company's recurring revenue streams from its calibration services business are expected to be key drivers of future performance.