Surge Components Reports Lower Third-Quarter Profit as Sales Dip

Surge Components, Inc. (OTC:SPRS) reported net income available to common shareholders of $218,032, or $0.04 per share, for the third quarter ended August 31, 2026, down from $469,705, or $0.08 per share, in the same period last year. Quarterly net sales slipped 1.8% to $10.09 million compared to $10.27 million a year earlier, driven by lower sales volume for certain customers. For the first nine months of the fiscal year, net sales rose 4.6% to $27.65 million.

Profitability during the quarter was affected by shrinking gross margins, which fell to 27.1% from 27.7%, and rising operational expenses. Selling and shipping expenses jumped 20.1% to $866,605 as the company added sales personnel, expanded regional offices across Europe and Asia, and increased marketing activities. General and administrative expenses also climbed 11.6% to $1.61 million, primarily due to higher compensation, rent, and public company costs.

Moving forward, investors will watch whether the company can leverage its expanded commercial network and shorter manufacturing lead times to win business in the growing artificial intelligence sector. Management is also working to mitigate China component tariffs by routing shipments through Hong Kong, though ongoing pressure from customers for regular price discounts and rebates remains an operational hurdle.