Holding company and industrial conglomerate Icahn (NYSE: IEP) reported Q3 CY2025 results exceeding the market’s revenue expectations, but sales fell by 2% year on year to $2.73 billion. Its GAAP profit of $0.49 per share was significantly above analysts’ consensus estimates.

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Company Overview

Founded in 1987, Icahn Enterprises (NASDAQ: IEP) is a diversified holding company primarily engaged in investment and asset management across various sectors.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Icahn Enterprises’s sales grew at a solid 9.5% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Icahn Enterprises’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 8.5% over the last two years.

This quarter, Icahn Enterprises’s revenue fell by 2% year on year to $2.73 billion but beat Wall Street’s estimates by 13.4%.

Looking ahead, sell-side analysts expect revenue to decline by 4.1% over the next 12 months. Although this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

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Operating Margin

Icahn Enterprises was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.9% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Icahn Enterprises’s operating margin decreased by 10.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Icahn Enterprises’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, Icahn Enterprises generated an operating margin profit margin of 30.2%, up 22.9 percentage points year on year. The increase was driven by stronger leverage on its cost of sales (not higher efficiency with its operating expenses), as indicated by its larger rise in gross margin.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although Icahn Enterprises’s full-year earnings are still negative, it reduced its losses and improved its EPS by 38.3% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Icahn Enterprises, its two-year annual EPS growth of 40.3% was higher than its five-year trend. We love it when earnings improve, but a caveat is that its EPS is still in the red.

In Q3, Icahn Enterprises reported EPS of $0.49, up from $0.05 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street is optimistic. Analysts forecast Icahn Enterprises’s full-year EPS of negative $0.79 will flip to positive $0.50.

Key Takeaways from Icahn Enterprises’s Q3 Results

It was good to see Icahn Enterprises beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 6% to $8.60 immediately after reporting.

Sure, Icahn Enterprises had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.