Albany International Corp /DE/ (AIN) — Executive Summary Albany International is a manufacturer of engineered textiles and advanced materials for industrial customers, exhibiting durable margins and strong cash-generation characteristics alongside uneven recent earnings momentum. Strengths and Financial Highlights The company shows several areas of strength: gross margin remains high at 47.4% , an
Albany International is a manufacturer of engineered textiles and advanced materials for industrial customers, exhibiting durable margins and strong cash-generation characteristics alongside uneven recent earnings momentum.
The company shows several areas of strength: gross margin remains high at 47.4%, and net margin is roughly 10.95%, indicating healthy unit economics.
At the same time there are clear areas of concern. Reported diluted EPS declined year‑over‑year by roughly 25.5% and the most recent split‑adjusted diluted EPS was $2.78, reversing some of the prior multi‑year gains.
Return on equity has trended lower, with trailing ROE at about 9.3% versus a 2019 peak of 18.9%, and ROE growth is negative, reflecting weaker capital returns.
Top‑line momentum has softened from a quarterly high of $313.3M (2024‑03‑31) to $288.8M in the latest quarter, indicating a modest recent revenue pullback.
The foundation of business quality and long-term value creation
ALBANY INTERNATIONAL CORP /DE/ ’s revenue shows a long-term increase from mid‑$100M quarters in the early 2010s into the $240M–$310M range in recent years. Revenue peaked at $313.3M in the quarter ended 2024-03-31 and has declined modestly since, reporting $298.4M in 2024-09-30 and $288.8M in 2025-03-31, indicating a recent pullback from the 2024 high.
Net income was generally in the mid‑teens to mid‑$40M range across much of the history shown, with three consecutive quarters in 2023 near $26–27M. A notable inflection occurred in the quarter ended 2024-12-31 when net income rose to $87.6M, the largest net income in the dataset. The most recent quarterly revenue was $288.8M. The most recent reported quarterly net income was $87.6M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Jan 2020 to Dec 2020
Analyzing long-term margin stability and competitive positioning
ALBANY INTERNATIONAL CORP /DE/ shows a most-recent net profit margin of 10.9% (2020-12-31), which is higher than earlier reported net margins in the dataset (4.1% in 2012, 6.8% in 2016, 3.8% in 2017).
Gross margin data in the dataset is most recent through 2018 and exhibits variability: after multi-year levels around the high 30s (2012–2016), gross margin dipped to single digits in mid-2013 and to 25.3% in March 2017, then moved up to the high 40s by mid-2018, with the latest gross margin reported at 47.4% (2018-09-30).
Operating margin in the available series was generally in the high teens from 2012–2016 (17.8%–19.4%), dropped to -1.2% in March 2017, and recovered to 8.8% by December 2017; the latest operating margin in the dataset is 8.8% (2017-12-31).
The most recent values observed: Gross Margin 47.4% (2018-09-30), Operating Margin 8.8% (2017-12-31), Net Profit Margin 10.9% (2020-12-31).
Understanding Profit Margins
Between Jan 2020 and Dec 2020, Albany International Corp De converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
For ALBANY INTERNATIONAL CORP /DE/, the most recent trailing twelve‑month data show a notable gap between reported earnings and cash generation: operating cash flow TTM is $218.4M while net income TTM is $87.6M. In recent quarters the operating cash flow has risen to a materially higher level compared with prior years, while net income has not shown the same increase, producing a sustained divergence in the latest period.
Looking at prior points in the dataset for context, net income peaked at $132.4M in 2019 and declined to $98.6M in 2020 before reaching $87.6M in 2024 TTM; operating cash flow was roughly $60.7M in mid‑2017 and has increased to $218.4M by 2024 TTM, marking a clear upward shift in cash generation versus earlier years. The most recent trailing twelve‑month operating cash flow was $218.4M and the most recent trailing twelve‑month net income was $87.6M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
ALBANY INTERNATIONAL CORP /DE/'s ROE shows a recent downward trend from a peak in 2019. After reaching 18.9% for the year ended 2019-12-31, trailing twelve‑month ROE fell to 12.1% by 2020-12-31 and declined further to 9.3% in the most recent period. The most recent observations therefore indicate lower capital returns compared with the 2019 high, with the latest data point carrying the most weight.
Earlier data display notable volatility: ROE was 6.3% in 2012, rose to 10.4% by 2016, dropped to 5.8% in 2017, and then rebounded sharply into 2019 before the subsequent decline. The most recent trailing twelve-month ROE for ALBANY INTERNATIONAL CORP /DE/ was 9.3% as of period ending 2024-12-31.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
ALBANY INTERNATIONAL CORP /DE/ shows a notable strengthening in operating cash generation in the most recent trailing twelve months, with operating cash flow rising to $218.4M. Over the longer sample points provided, operating cash moved from $60.7M (period ending 2017‑06‑30) to the current level, reflecting a sustained increase through the latest period.
Investing cash flows narrowed substantially year‑over‑year, moving from ‑$217.9M for the period ending 2023‑12‑31 to ‑$80.2M for the period ending 2024‑12‑31.
Financing cash flow in the latest TTM is a larger outflow at ‑$183.8M (period ending 2024‑12‑31), versus earlier historical values such as ‑$100.3M (2019‑12‑31) and a positive $12.9M (2017‑12‑31). The key recent inflection points are the sharp reduction in investing outflows between 2023 and 2024 and the elevated financing outflow in 2024 alongside stronger operating cash generation.
The most recent Operating Cash Flow (TTM) was $218.4M. The most recent Investing Cash Flow (TTM) was ‑$80.2M. The most recent Financing Cash Flow (TTM) was ‑$183.8M.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
ALBANY INTERNATIONAL CORP /DE/'s reported trailing twelve-month P/E ratio was 28.8x in 2024, reflecting an increase from 23.5x in 2020 and 18.1x in 2019. The series shows a pronounced inflection in 2017 when the P/E peaked at 59.0x, followed by a decline into 2019 and a gradual recovery through 2020 to 2024. Earlier observations include 28.2x in 2016 and 23.1x in 2012.
The current 28.8x reading sits near the 2016 level, above the 2012–2020 range excluding the 2017 spike, and well below the 2017 peak. The most recent Price-to-Earnings (P/E) ratio for ALBANY INTERNATIONAL CORP /DE/ was 28.8x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.