By Adriano Marchese

ATS shares rose Wednesday morning after company executives said its global footprint could help mitigate the effects of U.S.-imposed tariffs.

Shares traded 7.3% higher at 40.96 Canadian dollars ($28.60).

The Canadian automation and technology company said U.S. tariffs on Canadian imports will add complexity in the short-term to the U.S.-bound products built in Canada, which represented a mid-teens percentage of the its revenue for the last three fiscal quarters.

President Trump has threatened to impose 25% blanket tariffs on Canadian imports into the U.S. but before they took effect Monday, the two countries agreed to pause them for 30 days.

With operations in the U.S., Europe as well as in Canada, the company is more optimistic about the flexibility it can offer its customers to address disruptions over the longer term, executives said on the earnings call Wednesday.

"We do view this as an area of opportunity ... more mid-to-long term," Chief Executive Andrew Hider said in the earnings call.

This could be a boon for the company, TD Cowen's Cherilyn Radbourne said in a report. ATS operates across the world, including operations in the U.S., Europe and Canada. ATS could adjust its capacity to build all U.S. orders in the U.S., while still doing the engineering in Ontario, she said.

"Assuming that tariffs prompt U.S reshoring, we would expect ATS to benefit, as automation would very likely be required to alleviate labor skill and cost issues," Radbourne added.

In the third fiscal quarter ended Dec. 29, ATS' order bookings rose 32% to C$883 million, bringing the backlog up 8% higher than a year earlier to C$2.06 billion.

ATS credits the rise to strong organic growth and contributions from its acquisitions.

Revenue in the period fell to C$652 million from C$752 million. Analysts were expecting a decline to C$651.1 million. The decline was largely in its transportation business, which saw a 79% decline, on the back of softer demand in the EV market in North America.

Net income fell to C$6.5 million, or C$0.07 a share, from C$47.2 million, or C$0.48 a share, in the comparable quarter a year ago.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 05, 2025 10:48 ET (15:48 GMT)

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