Miller Industries (MLR) reported third-quarter diluted EPS of $0.53 on revenue of $212.2 million. Consensus was $0.64, so earnings missed by 17.2%. The year-over-year comparison looks strong: earnings grew 96.3% and revenue grew 18.8%. But that growth came against a soft $178.7 million quarter a year ago, and the sequential picture is weaker. Revenue fell from $240 million in Q2 and came in well short of the roughly $250 million quarterly run rate management guided to on the prior call. EPS also slipped from $0.63. That is the central tension. Management reaffirmed full-year guidance, but the third quarter made that guidance harder to reach.

The quality of the quarter deserves scrutiny. Gross margin was 14.0%, down from 15% in Q2 and about 20 basis points below the prior-year 14.2%. Leverage below the gross line helped: SG&A rose only 3.5% against 18.8% revenue growth. A lower tax provision also helped, since pretax income rose 74.8% while net income nearly doubled. For the first nine months, the picture is less flattering. Revenue is up just 2.4%, and diluted EPS of $1.21 trails last year's $1.68 by 28%. Management still expects full-year EPS to be generally in line with 2025, which puts substantial weight on the fourth quarter.

The acquisition accounting adds to the confusion. The press release says non-cash Omars acquisition-related items had a positive impact of about $0.09 per diluted share, based on the final third-party valuation. The call analysis, however, characterizes roughly 9 cents of Omars-related expenses in Q3. That figure exceeds the 4-5 cents management had guided for the entire remainder of the year. Investors should reconcile how those items flowed through the quarter before treating $0.53 as a clean run rate. Separately, management said Omars itself posted significant year-over-year growth and remains on track for first-year accretion.

On the call, management blamed the shortfall on production problems at domestic chassis suppliers and planned holiday downtime in Europe, not on demand. CEO William G. Miller II said the company has seen "no slowdown in customer demand." Still, order intake has been consistent rather than improving since Q2. Retail activity also remains pressured by Middle East tensions and elevated diesel prices. The math for Q4 is unforgiving. With about $633 million booked year to date, Miller needs roughly $217 million to reach the low end of its $850-$900 million range and about $267 million to reach the top. That points toward the lower half. Management did say October was strong and expects some catch-up as chassis suppliers recover. The one guidance item that actually moved up was full-year gross margin, now about 14% versus the mid-13% range reiterated all year. That increase reflects a lower chassis mix, and management expects the mix to normalize in Q4.

The longer-term story held up better than the quarter. Military commitments remain above $200 million, up from $150 million earlier in the year. Pre-production and test units are now being built, with serialized production expected in 2027. The new Century M65 65-ton rotator drew more than 1,000 distributors and customers to its launch, with orders expected in early 2027 and first sales in the second half. The GJ expansion in France was pulled forward to Q1 2027. Bears have legitimate ammunition, though:

• The Ooltewah facility, a roughly $100 million project tied to the military ramp, suffered a steel delay.
• Its production-ready timing slipped from late 2027 to "late 2027, early 2028."
• A tight construction market adds labor and inflation risk.
• The M65 could cannibalize the existing 75-ton rotator.

Cash generation was a genuine bright spot. Cash rose to $60.4 million, debt is down about $30 million year to date, and capital returns grew to $5.1 million. Part of that strength came from working capital. Inventories fell by about $21 million since year-end, while accounts payable rose by roughly $37 million.

Investor sentiment deteriorated meaningfully heading into the report. It moved from a modestly positive 0.173 to a slightly negative -0.070. The stock was at $52.07 as of the report date, down 5.8% from the open after the August report, though still about 6% above its 200-day moving average of $49.07. Sequential growth readings remain negative, consistent with the Q2-to-Q3 step-down.

The bottom line is that Miller delivered a big year-over-year gain but a disappointing quarter against both consensus and its own run-rate guidance. The miss is attributable mainly to supply-side disruptions rather than weaker demand. The raised margin guide, a stronger balance sheet, and the military pipeline keep the multi-year thesis intact. Even so, the reaffirmed revenue and EPS outlook now depends on a fourth-quarter catch-up that management has asserted but not yet delivered.