Graham Corporation (NYSE: GHM) stock plummeted 10.11% in the pre-market trading on Friday despite the company reporting robust financial results for the third quarter of fiscal 2025.

The Batavia, New York-based manufacturer of vacuum and heat transfer equipment, reported a 7.3% increase in revenue to $47.0 million for the quarter ended December 31, 2024, driven by continued strength in key end-markets like defense and chemical/petrochemical. Net income surged to $1.6 million, or $0.14 per diluted share, from $0.2 million, or $0.02 per diluted share in the prior-year period.

On an adjusted basis, Graham's earnings per diluted share increased 38% to $0.18, while adjusted EBITDA margin expanded 180 basis points to 8.6%.

The company reiterated its full-year revenue guidance of $200 million to $210 million for fiscal 2025 and raised its gross margin outlook to 24-25% from the previous range of 23-24%. Orders for the quarter stood at $24.8 million, resulting in a book-to-bill ratio of 1.0x for the first nine months. Graham's backlog as of December 31, 2024, was $384.7 million.

While Graham's third-quarter performance was strong across key metrics, the market reacted negatively, sending the stock down sharply in pre-market trading. The reasons for the sell-off are unclear, as the company's results and outlook point towards continued business momentum.