Albany Q2: Composites Soar, Machine Clothing Faces Headwinds

Albany (NYSE:AIN) announced its Q2 CY2026 financial results, revealing a mixed performance driven by robust momentum in its Engineered Composites segment, while its Machine Clothing division encountered significant operational hurdles. The company reported revenue of $329.5 million, a 5.8% year-on-year increase, and adjusted earnings per share (EPS) of $0.82, surpassing analyst estimates by 11.6%. Operating margins saw a substantial improvement, rising to 12.2% from 8.7% in the prior year.

The Engineered Composites segment demonstrated broad-based growth, fueled by demand from key programs including LEAP, the Boeing 787, and various missile contracts. This segment operated at full capacity, 24/7 across three sites, to meet high customer requirements.

Conversely, the Machine Clothing segment grappled with challenges, primarily attributed to equipment downtime in North America resulting from a machine failure. CEO Gunnar Kleveland identified this as the principal cause for the revenue shortfall. Demand in the Americas was further impacted by consolidations and facility closures among papermakers, although Europe remained stable and China showed signs of stabilization.

Albany is implementing recovery strategies for its Machine Clothing business, including the relocation of replacement machinery from Europe to mitigate lost volume by the end of the year. The company also secured a new contract for Pratt & Whitney’s Geared Turbofan (GTF) engine, which will expand its composites manufacturing operations in Mexico, and is engaged in advanced aerospace technology projects. Furthermore, a strategic review of its Salt Lake City composites facility is underway, with eight potential buyers expressing interest.

Looking ahead, Albany anticipates continued growth from aerospace and defense sectors, alongside a targeted recovery in Machine Clothing and disciplined cost management. Key performance catalysts include the successful turnaround of the Machine Clothing segment, the execution of new aerospace and defense contracts, and the resolution of the Salt Lake City facility review.