Northwest Pipe’s second quarter was marked by a positive market reaction thanks to robust performance from its Water Transmission Systems segment and notable margin expansion. Management attributed the results to higher project volumes, improved product mix, and efficient execution, with CEO Scott Montross highlighting that tons produced in Water Transmission Systems were up 26% and selling prices per ton increased by 6%. The Precast segment faced shipment delays due to severe weather but rebounded strongly in June, ending the quarter with an expanded order book, which positions the business for improved results in the second half.
Is now the time to buy NWPX? Find out in our full research report (it’s free for active Edge members).
Northwest Pipe (NWPX) Q2 CY2026 Highlights:
- Revenue: $159.5 million vs analyst estimates of $154.7 million (19.7% year-on-year growth, 3.1% beat)
- Adjusted EPS: $1.62 vs analyst estimates of $1.31 (23.5% beat)
- Operating Margin: 13.3%, up from 9.9% in the same quarter last year
- Market Capitalization: $1.22 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Northwest Pipe’s Q2 Earnings Call
- Julio Romero (Sidoti & Company) asked if core Water Transmission Systems sales would decline sequentially in the third quarter; CEO Scott Montross clarified that core business should be stronger than in the second quarter, with third quarter typically being the largest.
- Julio Romero (Sidoti & Company) sought clarity on WTS backlog normalization post-NDA project; Montross indicated backlog should return to the low-to-mid $300 million range, consistent with prior years, as the onetime project winds down.
- Tomohiko Sano (JPMorgan) questioned the sustainability of WTS margin gains; Montross attributed improvements to efficient execution, product mix, and higher volumes, expecting margin trends to remain favorable if demand holds steady.
- Tomohiko Sano (JPMorgan) asked about the Precast order book and demand outlook; Montross emphasized recovery from weather headwinds, ongoing nonresidential demand strength, and expected record Precast revenues for the year.
- Edward Jackson (Northland Securities) inquired about steel cost as a percentage of sales and its effect on pricing; Montross explained steel is a pass-through cost and not a margin driver, with overhead absorption and project mix playing larger roles.
Catalysts in Upcoming Quarters
For upcoming quarters, our team will monitor (1) the pace at which Water Transmission Systems backlog returns to normalized levels as the large NDA project concludes, (2) the ongoing recovery and order book growth in the Precast segment as nonresidential demand builds, and (3) management’s ability to execute on Precast expansion via M&A or greenfield investments. Shifts in steel prices and weather disruptions will also be key performance indicators.
Northwest Pipe currently trades at $126.84, up from $123.21 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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