Franklin Electric Co. Inc. (FELE) saw its stock price plummet 6.12% in pre-market trading on Tuesday following the release of its third-quarter 2025 earnings report. The significant drop comes as the company reported a substantial impact on its earnings per share (EPS) due to the termination of its U.S. pension plan.

While the company's Q3 adjusted earnings met analyst expectations at $1.30 per share, up from $1.17 in the same quarter last year, the reported EPS was only $0.37. This stark difference is attributed to a pre-tax settlement charge of $55.3 million ($41.7 million net of tax) resulting from the termination of the company's U.S. pension plan. This one-time charge had an EPS impact of approximately $0.93 per share net of tax.

Despite the earnings hit, Franklin Electric reported solid operational performance. The company's net sales increased by 9% to $581.7 million, surpassing the analyst consensus estimate of $563.25 million. All segments showed growth, with Water Systems up 11%, Energy Systems up 15%, and Distribution up 3%. The company maintained its full-year 2025 sales guidance of $2.09 billion to $2.15 billion, indicating confidence in its ongoing operations. However, investors seem to be focusing on the short-term earnings impact, leading to the sharp stock price decline.