10:27 AM EST, 02/05/2025 (MT Newswires) -- (Updates with National Bank commentary in the 5th and 6th paragraphs and shares in the last paragraph)

ATS , an automation solutions provider, rose more than 7% on Wednesday despite reporting lower-than-expected third quarter earnings.

Adjusted basic earnings per share fell to $0.32 cents, compared with $0.65 cents a year ago, missing a FactSet forecast of $0.35.

Revenues fell to $652 million, compared to $752 million a year ago, marginally beating the FactSet estimate of $651.1 million.

Q3 order bookings increased 32.2% to $883 million compared with $668 million, a year earlier. Order backlog at three months ended Dec. 29, rose 8% to $2.06 billion from a year earlier figure of $1.91 billion.

National Bank of Canada, whose price target for ATS is $54.00, in a first look at the result said "we have turned the corner" and added it "feels like we are through the worst of it." National Bank noted he major concern heading into the quarter centered around the prior quarter's $78 million of EBITDA not being the nadir of the company's performance. "It appears that we have turned the corner and despite what looks like a more than usual amount of adjustments to EBITDA, we can start building from here."

The bank said the outperform-rated company's guidance "looks ok" and the backlog looks "very good."

"While tariff-related language is cautionary in nature, mid-teens cross-border exposure as we previously highlighted is manageable," said National Bank analysts led by Maxim Sytchev. "We still believe that FQ1/26E (i.e. the June 2025 calendar quarter) will be first EPS growth quarter in some time; "gotta grow" for a growth company."

The company expects Q4 revenue in the range of $650 million to $710 million. However, ATS also expects lower transportation revenue to continue to negatively impact margins in the short-term, until reorganization actions are fully implemented.

With respect to potential tariffs by the U.S. on goods from Canada, the company said it could see short-term impacts if tariffs are implemented.

"The company's equipment and product revenues from its Canadian operations being sold into the U.S. has represented a mid-teens percentage of the company's total revenues for the nine months ended December 29, 2024," ATS said in a statement. "Management is assessing possible impacts and actively working with ATS' customers and suppliers to mitigate challenges that tariffs could pose."

Shares of ATS were last seen up $2.73 or 7.15%, at $40.92 in early morning trade on the Toronto Stock Exchange.

Price: 41.07, Change: +2.88, Percent Change: +7.54