CTS Corp Q3 2026: EPS Beats Expectations, Guidance Raised
As seen on the 24/7 Wall St. homepage on October 27, 2026.
Management raised full-year adjusted EPS guidance to $2.78 to $2.88 from $2.55 to $2.70, so the margin story is now baked into the outlook investors are paying for. Adjusted gross margin widened 330 basis points to 42.2%, helped by diversified end markets and the newly closed Millar deal.
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Investors who skipped this quarter missed adjusted earnings per share of $0.77, well clear of the consensus estimate of $0.65, with revenue also above expectations and higher than the same quarter a year ago. The strength came from across the business.
Margins are where the structural improvement shows up: adjusted gross margin expanded 330 basis points year over year to 42.2% on operational execution, a favorable product mix, and foreign exchange tailwinds. Operating income and free cash flow both grew sharply from the prior-year period.
Diversified end markets now account for 60% of total sales and keep growing, anchoring the shift away from transportation-heavy exposure. Medical revenue rose in the quarter and the company closed its acquisition of Millar, a precision MEMS pressure sensor maker, deepening its footprint in medical sensing. Aerospace and defense bookings more than doubled year over year.
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Management followed the strong quarter by raising full-year 2026 guidance on both top and bottom lines. The full-year revenue range moved up to $580 million to $590 million, from a prior range of $565 million to $585 million. Adjusted diluted EPS guidance was lifted to $2.78 to $2.88 from $2.55 to $2.70, with the Millar acquisition's expected contribution baked into both figures.
The company flagged variables worth monitoring: tariff exposure across China, Canada, and Mexico trade, rare earth element availability and cost, integration of the Millar business, and light vehicle production, which management expects to be flat to slightly down. The overall book-to-bill ratio of 1.18 indicates near-term demand is holding up, and the risks named in guidance are real inputs for the year ahead.
Mentioned: CTS