Shares of Latham Group, Inc. (NASDAQ: SWIM) soared 5.16% on Wednesday after the pool equipment maker reported better-than-expected earnings for the third quarter of 2024, despite a decline in revenue.

The company reported a net income of $5.9 million, or $0.051 per share, for the three months ended September 30, 2024, down 4.2% from the same period last year. However, the earnings per share (EPS) figure exceeded analysts' estimates by 1.1%.

Revenue for the quarter fell 6.4% year-over-year to $150.5 million, missing analysts' expectations by 1.1%. Despite the revenue decline, Latham Group's profit margin improved to 3.9% from 3.8% a year ago, driven by lower expenses.

The better-than-expected earnings results appear to have outweighed concerns over the revenue miss, boosting investor confidence in Latham Group's outlook. Analysts project the company's revenue to grow 4.6% annually on average over the next three years, outpacing the 3.3% growth forecast for the U.S. leisure industry.

While the company's shares are down 12% from a week ago, the positive earnings surprise could signal a potential turnaround in Latham Group's performance, supporting the stock's rally on Wednesday.