Shares of Hammond Power Solutions surged 7.4% to C$269.12 on August 7, extending a rally that began when the Canadian transformer manufacturer reported blowout second-quarter results on July 30. The question now: how much of the data-center supercycle is already priced in.
A Quarter That Blew Past Every Estimate
Hammond posted adjusted earnings of C$2.76 per share on revenue of C$324.8 million, both above Wall Street forecasts.
Adjusted EPS beat the consensus estimate of C$2.13 by 29.6% , while revenue topped estimates by 10.4%.
Adjusted EBITDA — a measure of operating cash profit — jumped 59.4% year over year to C$53.2 million. For shareholders, this signals that rising volumes are translating into outsized profit growth, not just bigger top-line numbers.
Data Centers Are Now the Main Engine
Data centers now account for more than 30% of revenue , and sales in the U.S. and Mexico climbed 73% year over year, powered by higher shipments into data centers and stronger pricing.
A global spending spree on AI-powered data centers has pushed capital expenditure forecasts sharply higher, turning power infrastructure gear into a critical bottleneck. Hammond is a direct beneficiary: its dry-type transformers regulate voltage inside these facilities. Order backlog at quarter end was 96.9% higher than a year ago, driven mainly by large project orders tied to data-center buildouts — giving management visibility well into the second half.
The AEG Deal Doubles Down — With Real Debt Attached
Hammond completed its C$365 million all-cash acquisition of AEG Power Solutions on June 29 , adding backup power and conversion equipment to its lineup. AEG had roughly C$326 million in revenue in 2025 , effectively doubling Hammond's scale. To fund the deal, HPS secured up to US$300 million in term debt and a US$150 million revolving credit facility.
The transaction is expected to be accretive to adjusted earnings per share in its first full year. Investors are betting the combined company can cross-sell into data centers, but integration risk is real, and the balance sheet is now far more leveraged.
Reported Earnings Tell a Different Story Beneath the adjusted numbers, reported net earnings actually fell to C$9.4 million from C$13.4 million a year earlier — a ~30% decline — which management attributed to acquisition-related expenses, foreign exchange losses, and higher stock-based compensation. If those one-time costs normalize, adjusted profits should hold. If they persist, the gap between the headline beat and bottom-line reality could test investor patience.