Shares of Steel Partners Holdings L.P. Common Units SPLP have inched up 1.9% since reporting results for the fourth quarter of 2024. This compares with the S&P 500 index’s 0.4% growth over the same time frame. Over the past month, the stock has lost 3.4% compared with the S&P 500’s 8.4% decline.

Earnings & Revenue Growth

Steel Partners reported fourth-quarter 2024 earnings per diluted common unit of $3.40, a 94% surge from $1.75 in the prior-year quarter.

SPLP registered fourth-quarter 2024 revenues of $497.9 million, reflecting a 6.6% increase from $466.9 million in the prior-year quarter. Net income surged 74.7% to $74.6 million from $42.7 million in the year-ago period.

For the full year, revenues climbed 6.4% to $2.03 billion from $1.91 billion in 2023. Net income soared 76.1% year over year to $271.2 million. Net income attributable to common unitholders was $261.6 million, or $11.38 per diluted unit, compared with $150.8 million, or $6.43 per diluted unit, in 2023.

Steel Partners Holdings LP Price, Consensus and EPS Surprise

Steel Partners Holdings LP price-consensus-eps-surprise-chart | Steel Partners Holdings LP Quote

Other Key Business Metrics

Steel Partners reported an adjusted EBITDA of $84.7 million for the fourth quarter, marking a 42.7% increase from $59.4 million in the prior-year quarter. The adjusted EBITDA margin expanded to 17% from 12.7% in the fourth quarter of 2023.

For the year, adjusted EBITDA increased 26% to $303 million, with the adjusted EBITDA margin rising to 14.9% from 12.6% in 2023. The adjusted free cash flow, however, declined to $169.3 million from $236 million in the previous year.

Liquidity remained solid, with net cash totaling $62.2 million as of Dec. 31, 2024, up from $56.4 million at the end of 2023. The company reduced total debt by $71.7 million year over year to $119.7 million.

Segmental Performance

The diversified industrial segment remained the largest revenue generator, marking an 8% year-over-year increase and contributing $297.4 million to the fourth quarter. This segment also saw a 94.6% jump in income before interest and taxes to $19.3 million.

Financial services’ revenues increased 2.9% year over year to $115.7 million in the quarter, with segmental profit rising 36.2% to $35.4 million. The supply-chain segment posted revenue growth of 9.1% to $49 million, whereas its income more than doubled to $7 million from $2.9 million in the prior-year quarter.

On the downside, the energy segment registered a modest 4.7% year-over-year revenue increase to $35.8 million in the fourth quarter, but full-year revenues declined 19.2% to $145 million due to lower rig hours.

Management Commentary

Executive chairman Warren Lichtenstein highlighted the company’s record revenues and strong EBITDA growth, attributing the performance to its focus on operational excellence and product quality. He noted that both diversified industrial and financial services businesses were key contributors to growth.

Factors Influencing Performance

The company benefited from higher sales in its industrial and financial services businesses, offsetting weakness in its energy segment. Higher net sales in the diversified industrial segment contributed $22 million to the fourth-quarter revenue increase. The financial services segment added $3.3 million in incremental revenues, whereas supply-chain revenues grew $4.1 million.

Cost of goods sold increased 3.9% year over year to $279.4 million in the fourth quarter, reflecting higher sales volumes. Selling, general and administrative expenses rose 4.8% year over year to $134.8 million, mainly driven by higher performance fees in the financial services segment.

Other Developments

Steel Partners continued its share repurchase program, reducing common unit outstanding from 21.3 million in 2023 to 19.1 million by the end of 2024. The company also decreased long-term debt by approximately 37%, enhancing its financial flexibility.

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This article originally published on Zacks Investment Research (zacks.com).

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