Quanex Building Products Corporation (NX - Snapshot Report) reported earnings of 13 cents per share in the third quarter of 2013, a more than threefold increase from 4 cents earned in the year-ago quarter. Reported earnings were a penny ahead of the Zacks Consensus Estimate.
The results benefited from higher sales in all the divisions and cost savings from facility consolidation, but partly offset by higher information technology and Enterprise Resource Planning (ERP) implementation costs.
Revenues improved 9% year over year to $259 million, but fell short of the Zacks Consensus Estimate of $266 million. Results were aided by the inclusion of sales related to the Aluminite acquisition and higher sales across all the divisions.
Cost of sales during the quarter increased 7% to $215 million from $201 million in the prior-year quarter. Gross profit increased 18% to $44 million. Consequently, gross margin expanded 130 basis points to 17% in the quarter.
Selling, general and administrative expenses decreased 7% to $24.7 million. Operating profit was $7.1 million in the third quarter compared with $1.4 million in the prior-year quarter.
Engineered Products Group (EPG): Net sales at the segment spiked 17% to $157 million in the quarter. Operating income for the segment increased 42% to $18.6 million in the third quarter from $13 million in the year-ago quarter.
Aluminum Sheet Products: The segment reported sales of $105 million, down 2% year over year. However, the segment reported an operating loss of $0.5 million in the quarter, narrower than the year-ago quarter’s loss of $3.2 million. The segment’s profits were negatively impacted by product mix, with increased demand for mill finished product, which commands a lower price when compared to painted sheet.
Cash and cash equivalents were $16 million as of Jul 31, 2013 compared with $71 million as of Oct 31, 2012. Long-term debt declined to $0.7 million as of July 31, 2013, compared with $1 million as of Oct 31, 2012. Cash flow from operating activities was $6.6 million in the nine months ended Jul 31, 2013 compared with $6 million in the year-ago comparable period.
Houston, Texas-based Quanex Building Products Corporation is a leading manufacturer of engineered materials, components and systems, serving domestic and international window and door OEMs through its Engineered Products and Aluminum Sheet Products Groups.
Quanex currently retains a Zacks Rank #4 (Sell). Other companies in the building and construction industry with favorable Zacks Ranks are CaesarStone Sdot-Yam Ltd. (CSTE - Snapshot Report), with a Zacks Rank #1 (Strong Buy), while Drew Industries Inc. and PGT, Inc. (PGTI - Snapshot Report) carry a Zacks Rank #2 (Buy).