FEDERAL SIGNAL CORP /DE/ has recently released its 10-Q report. Federal Signal Corporation designs and supplies vehicles, equipment, and public safety systems for municipal, governmental, industrial, and commercial customers in the U.S., Canada, Europe, and other markets. Its operations are organized into two segments: Environmental Solutions Group and Safety and Security Systems Group, with products sold alongside parts, service, rentals, and training.
In Item 2, management said the June 30, 2026 quarter and first half were driven by higher sales, acquisitions, and pricing actions. Net sales rose to $670.2 million in the second quarter from $564.6 million a year earlier, up $105.6 million, or 19%; for the first six months, sales increased to $1.30 billion from $1.03 billion, up $267.4 million, or 26%.
Environmental Solutions Group accounted for most of the growth. Quarterly sales in that segment increased $97.2 million, or 20%, including gains of $47.7 million in other specialty equipment, $28.4 million in aftermarket offerings, $10.7 million in vacuum trucks, and $10.5 million in dump truck bodies and trailers. For the first half, segment sales rose $242.5 million, or 28%, led by $153.9 million more in other specialty equipment and $45.6 million more in aftermarket offerings.
Safety and Security Systems Group also posted higher sales, though at a smaller scale. Quarterly net sales increased $8.4 million, or 10%, including a $7.5 million increase in public safety equipment and a $0.9 million increase in industrial signaling equipment. For the first half, sales in the segment rose $24.9 million, or 16%, with public safety equipment up $20.5 million and industrial signaling equipment up $2.3 million.
Cost of sales climbed faster in dollar terms than sales, but gross profit still improved. Quarterly cost of sales rose $71.4 million to $466.4 million, while gross profit increased $34.2 million to $203.8 million. For the six months, cost of sales increased $184.6 million to $912.6 million, and gross profit rose $82.8 million to $383.2 million.
Operating income reached $118.2 million in the quarter, up from $97.7 million, and $217.9 million for the first half, up from $163.4 million. Operating margin was 17.6% in the quarter versus 17.3% a year earlier, and 16.8% for the first half versus 15.9% a year earlier. SEG&A expenses rose to $78.3 million in the quarter from $66.9 million, and to $150.3 million for the first half from $127.1 million.
Higher interest expense reduced some of the benefit from operating gains. Net interest expense was $6.0 million in the quarter, up from $3.5 million, and $12.9 million for the first half, up from $6.5 million. Income before taxes increased to $111.4 million in the quarter from $93.4 million, and to $203.6 million for the first half from $155.4 million.
Net income was $86.1 million in the quarter, compared with $71.4 million a year earlier, and $156.5 million for the first half, compared with $117.7 million. Diluted earnings per share increased to $1.40 from $1.16 in the quarter and to $2.54 from $1.91 in the first half.
Orders also improved overall. Total orders were $636.7 million in the quarter, up 18% from $539.7 million, and $1.26 billion for the first half, up 14% from $1.11 billion. Environmental Solutions Group orders rose to $548 million in the quarter and $1.08 billion in the first half, while Safety and Security Systems Group orders fell to $89 million in the quarter and $177 million in the first half.
Backlog was $1.00 billion at June 30, 2026, down from $1.08 billion a year earlier. As a result of these announcements, the company's shares have moved 11.72% on the market, and are now trading at a price of $124.97. For the full picture, make sure to review FEDERAL SIGNAL CORP /DE/'s 10-Q report.
