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Beacon Roofing (BECN) Up 4.9% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Beacon Roofing Supply, Inc. (BECN - Free Report) . Shares have added about 4.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Beacon Roofing Q1 Earnings Meet Estimates, Sales Lag
Beacon Roofing Supply reported adjusted earnings of $0.44 per share for first-quarter fiscal 2017, in line with the Zacks Consensus Estimate. Earnings increased 7% on a year-over-year basis.
Strong volume growth within residential roofing and significant improvement in gross margins were partially offset by decline in non-residential roofing sales and higher expenses that were impacted by the proportionately higher costs to serve residential customers.
Including acquisition-related items, the company reported a profit of $0.33 per share in the quarter compared with $0.12 in the prior-year quarter.
Operational Update
This distributor of residential and non-residential roofing materials posted record sales of $1.002 billion, exhibiting a 2.6% year-over-year rise. Revenues also beat the Zacks Consensus Estimate of $999.66 million and also marked the third consecutive quarter of sales exceeding $1 billion. The revenue growth included acquisition growth of approximately $44 million while organic sales were flat during the quarter. Residential roofing product sales increased 7%, while non-residential roofing product sales dropped 10%. Complementary product sales were up 19.8%. Organic sales inched up 2.4% for the quarter.
Cost of goods sold increased 1% to $751 million. Gross profit was $251 million, up 8% from $233 million in the year-ago quarter. Gross margin expanded 117 basis points (bps) to 25.1%.
Operating expenses for the quarter declined 1% year over year to $204 million. Operating income in the quarter was $47 million, compared with $27 million in the prior-year quarter.
Financials
Beacon Roofing reported cash and cash equivalents of $73.3 million as of Dec 31, 2016, compared with $32.2 million as of Dec 31, 2015. The company generated $78.1 million in cash from operating activities for fiscal 2016 compared with $44.7 million in the prior fiscal.
2017 Outlook
The company expects more normalized weather conditions to benefit the latter half of the year. The company continues to focus on its growth strategy in 2017 including integrating the three acquisitions made in December and January that added nine branches, including seven in the Pacific Northwest. Further, the company will maintain its focus on sales growth, gross margin stability, improved operating leverage and will also help maintain earnings.
Beacon Roofing is targeting five to 10 total openings for fiscal 2017. Along with its branch opening strategy, the company will also focus on potential acquisitions.
For fiscal 2017, the company maintained its total revenue growth range of 3–7% for 2017, which assumes 2% to 5% organic and 1% to 2% incremental contribution from acquisitions. The company anticipates adjusted earnings per share to be around $2.33.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Beacon Roofing's stock has a nice Growth score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for an below average return from the stock in the next few months.
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Beacon Roofing (BECN) Up 4.9% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Beacon Roofing Supply, Inc. (BECN - Free Report) . Shares have added about 4.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Beacon Roofing Q1 Earnings Meet Estimates, Sales Lag
Beacon Roofing Supply reported adjusted earnings of $0.44 per share for first-quarter fiscal 2017, in line with the Zacks Consensus Estimate. Earnings increased 7% on a year-over-year basis.
Strong volume growth within residential roofing and significant improvement in gross margins were partially offset by decline in non-residential roofing sales and higher expenses that were impacted by the proportionately higher costs to serve residential customers.
Including acquisition-related items, the company reported a profit of $0.33 per share in the quarter compared with $0.12 in the prior-year quarter.
Operational Update
This distributor of residential and non-residential roofing materials posted record sales of $1.002 billion, exhibiting a 2.6% year-over-year rise. Revenues also beat the Zacks Consensus Estimate of $999.66 million and also marked the third consecutive quarter of sales exceeding $1 billion. The revenue growth included acquisition growth of approximately $44 million while organic sales were flat during the quarter. Residential roofing product sales increased 7%, while non-residential roofing product sales dropped 10%. Complementary product sales were up 19.8%. Organic sales inched up 2.4% for the quarter.
Cost of goods sold increased 1% to $751 million. Gross profit was $251 million, up 8% from $233 million in the year-ago quarter. Gross margin expanded 117 basis points (bps) to 25.1%.
Operating expenses for the quarter declined 1% year over year to $204 million. Operating income in the quarter was $47 million, compared with $27 million in the prior-year quarter.
Financials
Beacon Roofing reported cash and cash equivalents of $73.3 million as of Dec 31, 2016, compared with $32.2 million as of Dec 31, 2015. The company generated $78.1 million in cash from operating activities for fiscal 2016 compared with $44.7 million in the prior fiscal.
2017 Outlook
The company expects more normalized weather conditions to benefit the latter half of the year. The company continues to focus on its growth strategy in 2017 including integrating the three acquisitions made in December and January that added nine branches, including seven in the Pacific Northwest. Further, the company will maintain its focus on sales growth, gross margin stability, improved operating leverage and will also help maintain earnings.
Beacon Roofing is targeting five to 10 total openings for fiscal 2017. Along with its branch opening strategy, the company will also focus on potential acquisitions.
For fiscal 2017, the company maintained its total revenue growth range of 3–7% for 2017, which assumes 2% to 5% organic and 1% to 2% incremental contribution from acquisitions. The company anticipates adjusted earnings per share to be around $2.33.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Beacon Roofing Supply, Inc. Price and Consensus
Beacon Roofing Supply, Inc. Price and Consensus | Beacon Roofing Supply, Inc. Quote
VGM Scores
At this time, Beacon Roofing's stock has a nice Growth score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for an below average return from the stock in the next few months.