Air Link Communication Limited (PSX: AIRLINK) posted consolidated earnings of Rs. 3.65 billion (EPS: Rs. 9.23) for the first nine months of fiscal year 2026, marking a 28 percent increase year-on-year, supported by improved overall performance during the period.

Despite the strong cumulative results, profitability declined sharply in the third quarter. The company reported 3QFY26 earnings of Rs. 595 million (EPS: Rs. 1.50), reflecting an 11 percent rise compared to the same quarter last year but a significant 60 percent drop on a quarter-on-quarter basis.

The quarterly outcome came in below market expectations, primarily due to weaker sales volumes and compression in gross margins.

Net sales during the quarter totaled Rs. 19.6 billion, down 31 percent year-on-year and 20 percent compared to the previous quarter. Industry checks suggest that lower manufacturing activity, driven by inventory accumulation, weighed on sales performance. Additionally, geopolitical tensions disrupted sea freight schedules, causing shipment delays that further impacted revenue.

Gross margins narrowed to 10 percent in 3QFY26, compared with 16 percent recorded in the previous quarter, mainly due to changes in the company’s product mix.

On the positive side, finance costs declined substantially, falling 77 percent year-on-year and 71 percent quarter-on-quarter to Rs. 322 million, despite an increase in short-term borrowings.

Other income strengthened during the period, rising to Rs. 207 million, nearly doubling compared to last year and increasing 83 percent from the preceding quarter.

The company’s effective tax rate increased to 44 percent during the quarter, compared with 39 percent a year earlier and 27 percent in 2QFY26, bringing the cumulative tax rate for 9MFY26 to 31 percent.

Overall, Air Link’s nine-month performance remained strong, although the latest quarter reflected operational pressures stemming from slower manufacturing activity, inventory buildup, and external supply chain disruptions.