Back to top

Analyst Blog

Michigan-based, Universal Forest Products Inc.(UFPI - Analyst Report) was recently downgraded by us from Neutral to an Underperform recommendation.

The company, of late, reported its fourth quarter 2011 results with break-even adjusted earnings per share, faring well against the year-ago reported loss of 9 cents and the Zacks Consensus Estimate of a 4 cent loss per share. Revenue also surged 11% in all segments, except the Residential Construction segment, which posted good results.

The 2008 global economic meltdown had far reaching effects on businesses worldwide with companies relying essentially on the US housing market and feeling the pinch rather acutely. As time flew by, things started taking a turn for the better, but the weakness in the US housing markets still persists and becomes a constant source of worry for companies like Universal Forest.

Moreover, falling gross margin along with significant volatility in the cost of commodity lumber products from primary producers remains a prime cause of concern for Universal Forest. Management also fears that customer demand would remain soft throughout the fiscal year 2012. In addition, Universal’s precarious dependence on general market conditions heightens top-line risks in the event of any adverse condition.

The Michigan-based company primarily engineers, manufacturers, treats, distributes, and installs lumber, composite wood, plastic and other building products for its do-it-yourself (DIY), site-built construction (homebuilders), manufactured housing, and industrial markets. The company faces stiff competition from industry players like Bluelinx Holdings Inc. , Builders FirstSource Inc. (BLDR - Snapshot Report) and Louisiana-Pacific Corp. (LPX - Snapshot Report).

The Zacks Consensus Estimates for the fiscal years 2012 and 2013 stand at $1.06 and $1.75 per share, representing a year-over-year growth of 232.03% and 64.94%, respectively. Estimate for the first quarter 2012 is one cent.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%