Why Did Insteel Industries Inc. (IIIN) Shares Soar 10.4%?

Insteel Industries Inc. (IIIN) shares surged 10.4% in pre-market trading on April 18, 2025, driven by strong financial performance and positive investor sentiment.

Insteel Industries Inc. reported a significant increase in net earnings for the second fiscal quarter, rising to $10.2 million from $6.9 million a year ago. This growth was accompanied by a rise in earnings per share (EPS) to $0.52 per diluted share from $0.35, excluding non-recurring restructuring charges, EPS was $0.55. The company's shipments increased by 28.9% year-over-year and 17.9% sequentially from Q1, driven by increased activity in construction end markets. Gross profit for the quarter increased by $8.8 million to $24.5 million, with gross margin expanding to 15.3% from 12.3%.

The company successfully integrated acquired assets from the first fiscal quarter, contributing to operational and freight synergies. However, average selling prices declined 2.2% year-over-year, although they rose 5.1% sequentially from the first quarter. The supply of wire rod in the US market has become more constrained, leading to price increases and potential disruptions in operations. SG&A expenses increased to $10.8 million, driven by higher compensation costs and unfavorable fluctuations in the cash surrender value of life insurance policies. The effective tax rate for the quarter increased slightly to 23.2% from 22.5% last year. Uncertainties remain due to shifting US trade policies and potential economic fallout from the administration's tariff strategy, affecting long-term demand forecasts.