Albany International Corp has reported a strong financial turnaround in its third quarter ended September 30, 2026, with net revenue climbing 34 per cent year on year to $349.5 million, up from $261.4 million in the same quarter a year earlier. The results were largely driven by an exceptional performance in its Engineered Composites segment, which more than doubled its revenue on a constant-currency basis, underpinned by growing aerospace and defence programme activity.
The company also signalled a clear strategic shift, stating that it is moving its focus away from legacy issues and directing its attention toward high-growth opportunities in aerospace and defence, spanning missiles, hypersonics, space, and next-generation aircraft applications.
From Loss to Profit: A Striking Financial Turnaround
Albany International’s Q3 2026 results mark a dramatic reversal from the prior-year period. Net income attributable to the company came in at $41.7 million, translating to diluted earnings per share of $1.46. This compares sharply with a net loss of $97.8 million, or a diluted loss per share of $3.37, recorded in Q3 2025.
Operating income reached $59.4 million, against an operating loss of $116.5 million in the year-ago quarter. Adjusted earnings per share rose to $1.68 from a prior-year loss of $3.29. Adjusted EBITDA turned firmly positive at $100.1 million, recovering from a negative $91.1 million in the same quarter last year — a swing that reflects the combined impact of contract modifications, operational efficiencies, and improved programme volumes.
Gross profit for the quarter was $140.4 million, compared with a gross loss of $49.9 million in Q3 2025. Gross margin stood at 40.2 per cent, up sharply from negative 19.1 per cent a year earlier. The quarter’s results included a $33.4 million favourable gross-margin adjustment from CH-53K contract modifications, partially offset by catch-up depreciation and amortisation charges. It is worth noting that the prior-year quarter had carried a $147.3 million unfavourable CH-53K loss-reserve adjustment, which had significantly weighed on those results.
Engineered Composites Powers the Rebound
The Engineered Composites segment was the primary engine behind Albany International’s Q3 2026 results, with revenue surging 107 per cent on a constant-currency basis to $179.7 million. Growth was driven by both commercial and defence programmes, most notably the LEAP engine programme, the CH-53K heavy-lift helicopter programme, and missile programmes.
The segment’s adjusted EBITDA margin improved dramatically to 36.5 per cent, compared with a deeply negative 155.5 per cent in Q3 2025. This recovery was attributed to the CH-53K contract modifications, higher programme volumes, and improved operational efficiency.
The strategic review conclusion related to the company’s Amelia Earhart Drive facility generated a $44.4 million adjusted EBITDA benefit tied to the CH-53K contract modification — and was finalised in under a year.
Gunnar Kleveland, president and chief executive officer of Albany International Corp, commented on the quarter’s performance: “I’m incredibly proud of the performance of the team in the third quarter. The team, with Engineered Composites leading the way, was able to favourably finalise the strategic review of our Amelia Earhart Drive facility in under a year and end the quarter with solid performance.”
Machine Clothing: Resilience Amid Market Cyclicality
The Machine Clothing segment recorded revenue of $169.8 million in Q3 2026, representing a 3 per cent decline on a constant-currency basis, primarily due to cyclical softness in the Americas. Its adjusted EBITDA margin fell to 27.2 per cent from 31 per cent in the year-ago period, reflecting volume shifts and geographic mix effects.
Despite the margin compression, the business reported steady conditions in Asia and improving volumes in Europe, pointing to underlying resilience across its global footprint. The company is also actively optimising the Machine Clothing segment’s manufacturing footprint, which contributed to restructuring expenses rising to $7.3 million from $3.2 million in the prior-year period.
On the segment’s performance, Kleveland noted: “In Machine Clothing, our team navigated a dynamic market environment and delivered sales at the high-end of expectations, reflecting the resilience of the business and the strength of our team.”
Cost and Cash Flow Overview
Selling, general and administrative expenses increased to $61.5 million from $51.9 million in Q3 2025, driven primarily by higher compensation and strategic-review related costs. Technical and research expenses edged up to $12.2 million from $11.5 million, while capital expenditure declined to $12.2 million from $18.3 million.
Free cash flow improved to $36.5 million from $25.7 million in the prior-year quarter, reflecting stronger operational earnings alongside disciplined capital spending.
Albany International ended Q3 2026 with $79.1 million in cash and cash equivalents, total debt of $422.1 million, and net debt of $343 million.
Q4 2026 Outlook
For the fourth quarter of 2026, Albany International expects consolidated net revenue in the range of $325 million to $335 million. Machine Clothing revenue is projected between $170 million and $175 million, while Engineered Composites revenue is anticipated in the $155 million to $160 million range.
The company expects adjusted earnings per share of $0.65 to $0.75 for Q4 2026. Albany has also revised its effective tax-rate estimate downward to 29.5 per cent from its earlier forecast of 31.5 per cent.
With its Engineered Composites segment gaining momentum across defence and aerospace programmes, and Machine Clothing demonstrating steady global demand, Albany International’s Q3 2026 results reflect a company working through a meaningful operational and financial reset as it repositions itself around higher-growth aerospace and defence opportunities.
