Frequency Electronics Posts Q4 Loss of $0.50/Share, Sets Aggressive Three-Year Margin Targets Amid Record $111M Backlog

summarizeSummary

Frequency Electronics reported a Q4 loss of $0.50 per share but unveiled a record $111 million backlog and ambitious three-year margin targets, signaling a strategic shift toward high-volume production.

check_boxKey Events · Earnings and Guidance · FEIM

• Q4 Loss of $0.50/Share

  Net loss of $4.9 million, or $0.50 per diluted share, compared to net income of $3.2 million, or $0.33 per share, a year ago. Revenue fell to $15.4 million from $20.0 million.

• Record $111M Funded Backlog

  Backlog reached $111 million, up 34% sequentially and 59% year-over-year, driven by new contract wins in space and defense.

• Three-Year Margin Targets Set

  Management established minimum gross margin target of 50% and operating margin target of 30% by fiscal 2029, with a revenue target of at least $150 million (34% CAGR).

• Restructuring and Non-Recurring Charges

  FEI-Elcom restructuring resulted in a $3.8 million inventory write-down; additional non-recurring charges from a one-time change in employee sick/paid-time-off policies further depressed reported margins.

auto_awesomeAnalysis · FEIM · Industrial Applications And Services

Frequency Electronics reported a sharp Q4 loss of $0.50 per share, driven by restructuring charges and investments, but the real story is the future: a record $111 million funded backlog and aggressive three-year targets of 50% gross margin and 30% operating margin on at least $150 million in revenue. The company is pivoting from bespoke manufacturing to high-rate production, front-loading costs now to capture a 34% revenue CAGR. Adjusted numbers show underlying profitability, but the reported loss and cash burn raise near-term concerns. The market will weigh the credibility of these targets against the current $54 stock price and $583 million market cap.