Atmus Filtration Technologies (NYSE:ATMU) raised its 2026 revenue and adjusted earnings forecasts after third-quarter sales rose 14%, supported by its acquisition of Koch Filter and stronger demand in U.S. heavy- and medium-duty first-fit markets.
The company reported third-quarter sales of $510 million, up from $448 million a year earlier. Adjusted earnings per share increased to $0.77 from $0.69, while adjusted EBITDA rose to $104 million from $92 million. The adjusted EBITDA margin was unchanged at 20.4%.
CEO Steph Disher said Atmus expects strength in first-fit demand, which refers to filtration products installed in new equipment, to continue through the first half of 2027. She cautioned that the outlook remains uncertain as customers await final outcomes on 2027 emissions regulations.
Higher Revenue and Earnings Outlook
Atmus raised its full-year revenue forecast to $2.01 billion to $2.035 billion, representing approximately 15% growth from 2025 at the midpoint. It also raised its adjusted earnings forecast to $2.90 to $3.05 per share and maintained its adjusted EBITDA margin guidance of 19.75% to 20.25%.
The company now expects Power Solutions revenue of $1.85 billion to $1.87 billion, with volume growth of 2% to 3%. Disher said strong heavy- and medium-duty demand should more than offset pressure on diesel pickup truck volumes for the rest of the year. Industrial Solutions revenue is expected to reach $160 million to $165 million.
Atmus expects its aftermarket, the majority of its business, to remain relatively flat year over year. Disher said freight rates have improved, but the company has not yet seen a corresponding inflection in freight activity. She described stronger conditions in Latin America and more challenging markets elsewhere, including effects from the Middle East conflict in Europe and India.
Tariff Refunds Weigh on Sales
Power Solutions sales rose 5% to $468 million in the third quarter. CFO Jack Kienzler said the increase reflected higher volumes, pricing and favorable foreign exchange, partly offset by pricing related to tariff refunds. Industrial Solutions contributed $42 million in sales following the Koch Filter acquisition.
Revenue was reduced by $9 million for refunds of tariffs imposed under the International Emergency Economic Powers Act that Atmus expects to return to customers in the fourth quarter. Kienzler said the company recorded a corresponding reduction in cost of sales and does not expect additional material refunds.
Gross margin improved to 30.3% from 28.9%, reflecting contributions from Koch Filter, higher volume and favorable manufacturing costs, partly offset by higher material costs. Kienzler said Atmus expects pricing to more than offset costs for the full year, excluding tariffs, despite rising input costs in the second half.
Cash Flow Supports Buybacks and Growth Investments
Adjusted free cash flow increased to $88 million in the quarter from $72 million a year earlier. Through September 30, adjusted free cash flow reached $189 million, an increase of $61 million from the comparable period in 2025.
Atmus returned $25 million to shareholders during the quarter, including $20 million in share repurchases and $5 million in dividends. Its board also approved a new $300 million share repurchase authorization, replacing the previous program.
The company repaid $50 million of debt during the third quarter and another $50 million in early October. Kienzler said net debt was an estimated 1.7 times trailing 12-month adjusted EBITDA at September 30. Disher said the company considers debt to be at or around the right level, freeing up the majority of cash flow for potential repurchases, subject to acquisition opportunities and other priorities.
Atmus has completed the integration of Koch Filter and opened a HEPA filter clean room with testing capabilities at its Louisville manufacturing site. Disher said the investment supports expansion into higher-efficiency products and markets such as healthcare. The company also plans to open a facility in Florida next year and continues to evaluate acquisitions, particularly in industrial air filtration.
About Atmus Filtration Technologies (NYSE:ATMU)
Atmus Filtration Technologies Inc (NYSE: ATMU) is a filtration products and solutions company serving the commercial vehicle, industrial, agriculture, construction, mining and power-generation markets. The company develops and manufactures filtration technologies designed to protect engines, equipment and other critical systems while supporting performance and maintenance requirements.
Atmus’s product portfolio includes air, fuel, lube and hydraulic filtration products, as well as solutions for emissions control, crankcase ventilation and coolant management.
