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Albany International gets most of its revenue from Machine Clothing, which sells custom-designed fabrics and process belts directly to industrial users. Most of this business serves paper machines, with fabrics used in forming, pressing and drying paper, paperboard and tissue. These are consumables tailored to each machine and production process. Demand depends on paper production and replacement needs; longer-lasting fabrics and improvements in papermaking can reduce how much customers buy.
Its other business, Albany Engineered Composites, sells composite parts and assemblies to commercial and defense aerospace customers. Safran is its largest customer, chiefly buying LEAP-engine fan blades and fan cases through Albany Safran Composites. Albany is the exclusive supplier of those parts under a long-term agreement that reimburses costs and adds a fee, but Safran has no minimum-purchase obligation. This makes aerospace revenue particularly dependent on LEAP demand, alongside other aircraft and defense programs. Albany must maintain aerospace quality certifications and meet required U.S. defense cybersecurity certifications to keep serving the relevant customers and programs.
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Albany’s results hinge on demand for paper-machine consumables and aerospace program economics; watch Safran, its largest aerospace customer, which accounts for approximately 15% of consolidated revenue, principally through LEAP fan blades and cases.
Boeing’s aircraft production affects Albany’s sales of aircraft components and LEAP engine composites for the 737 MAX, while Boeing sells the finished jets principally to airlines worldwide. Watch Boeing’s production disruptions: they have previously contributed to sharp declines in Albany’s LEAP revenue.
Lockheed Martin’s defense production feeds Albany’s aerospace revenue because Albany supplies composite missile bodies for its JASSM air-to-surface missiles, sold to defense customers principally comprising U.S. government agencies and allies. JASSM production news is the specific signal to watch for this part of Albany’s business.
Kadant and Albany both earn revenue from keeping paper mills running: Albany sells fabrics and belts used in paper machines, while Kadant sells blades that clean the machines, cleaning systems and related consumables. Kadant’s sales of these parts and consumables offer a read on the same mills’ production and maintenance spending that supports Albany’s fabric business.
Lockheed Martin Corp. earningsLMT
Lockheed Martin's report will offer a demand signal for Albany International's composite missile-body business through any update on JASSM production.
Watch Lockheed Martin's update on JASSM production. Steady or rising production would point to continued demand for the missile program and support for Albany International's composite bodies; slower production would mean weaker demand support for this part of Albany's aerospace business.
Boeing Company earningsBA
Boeing's report will show whether 737 MAX production is running more smoothly, a signal for Albany International's related aircraft-component and LEAP engine-composite sales.
Watch Boeing's account of production disruptions. Smoother aircraft production would point to a steadier production chain for the components and LEAP engine composites connected to Albany International's sales; continued disruption could keep holding up those related sales.
Albany International Corp earningsThis company
Albany International's report will show whether paper-machine clothing sales and aerospace contract costs are stabilizing the two businesses that drive its revenue and profit.
Read Machine Clothing revenue and gross margin alongside Engineered Composites gross profit and adjustments to estimated profits on long-term contracts. Steady MC results, a smaller AEC loss and fewer large negative adjustments would suggest mill demand and aerospace contract costs are no longer worsening; weaker MC revenue or margin alongside further large negative AEC adjustments would show both pressures still weighing on Albany International.
Kadant Inc. earningsKAI
Kadant's parts and consumables sales will show whether paper mills' production and maintenance spending is also supporting Albany International's Machine Clothing business.
Compare the direction of Kadant's paper-machine parts and consumables sales with Albany International's Machine Clothing revenue. Strength in both would suggest mill production and maintenance spending is supporting demand for machine clothing; weaker Kadant sales in those products would point to less support from those mills.
