Franklin Electric Co., Inc.

What they do

Franklin Electric designs, manufactures, and distributes water and fuel pumping systems, primarily submersible motors, pumps, electronic controls, water treatment systems, and related parts. It serves residential, agricultural, municipal, industrial, and fueling end markets through three reportable segments: Water Systems, Energy Systems, and Distribution. Products are sold worldwide by its employee sales force and independent manufacturing representatives to specialty distributors, OEMs, industrial and petroleum equipment distributors, and water well contractors.

Revenue drivers

• Water Systems — Largest segment, contributing about 60% of total revenue in 2025. Generates sales from motors, pumps, drives, controls, and water treatment systems for groundwater, water transfer, and wastewater applications across residential, agricultural, municipal, and industrial markets.
• Distribution — Sells groundwater equipment and pumping systems primarily to water well contractors through company-owned and third-party distribution branches in the U.S. Increased 11% in Q2 2026, driven by higher volumes, acquisitions, and price realization.
• Energy Systems — Supplies submersible fueling systems, pumps, pipes, electronic controls, and monitoring devices for gas stations. Contributed $80.2 million in Q2 2026, up 3% year-over-year, with higher price realization and volumes.

Recent performance

In the second quarter of 2026, consolidated net sales were $622.9 million, up 6% from $587.4 million in Q2 2025. Operating income increased 6% to $93.6 million, with operating margin of 15.0%. GAAP diluted EPS was $1.46, up 11% from $1.31, while adjusted diluted EPS rose 18% to $1.55. Six-month net sales reached $1.12 billion, up from $1.04 billion in the prior year period.

Strategy

Management is focused on organic volume growth initiatives, including adding new customers, strengthening distribution channels, and investing in innovation across high-growth applications such as dewatering for mining, pressure boosting, and water treatment. The company completed acquisitions in 2025—PumpEng Pty Ltd. (submersible pumps for mining, Australia) and Barnes de Colombia S.A. (industrial and commercial pumps, Colombia)—to expand geographic and product reach. It also renamed the Fueling Systems segment to Energy Systems to reflect its broader portfolio and growth strategy. Management emphasizes operational discipline, managing inflationary pressures, and leveraging its global footprint and in-region manufacturing to support profitable growth.

Risks

• Housing starts downturn — Reduced housing starts can lower demand for the company's products, negatively impacting revenues and earnings.
• Commodity and energy price volatility — The company does not generally hedge raw materials or energy, so significant price increases or supply disruptions could raise costs and compress margins.
• Energy and mining industry cyclicality — Demand depends on output in coal, iron ore, gold, copper, oil, and natural gas industries; commodity price swings can reduce demand for products.
• Inflationary pressures on sourced materials and logistics — Management noted ongoing inflationary price pressures in sourced materials and logistics lanes, which could impact profitability if not offset by price realization.

Outlook

Management is raising full-year 2026 guidance, projecting net sales in the range of $2.21 billion to $2.29 billion and adjusted diluted EPS of $4.50 to $4.70. This reflects strong Q2 performance and continued momentum in core businesses. The company sees solid demand in dewatering for mining, pressure boosting, and water treatment in fast-growing regions.