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UFP Industries (UFPI) Q2 Earnings Top Estimates, Stock Up
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UFP Industries, Inc.’s (UFPI - Free Report) shares jumped more than 7% in the after-hours trading session on Jul 22, after the company reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products as well as lower costs.
Recently, the company acquired T&R Lumber, a manufacturer and distributer of products primarily used by nurseries, including tree boxes, plastic containers, stakes as well as trellises.
Earnings & Net Sales Discussion
During the reported quarter, UFP Industries reported earnings of $1.08 per share, comfortably surpassing the consensus mark of 63 cents by 71.4% and increasing 22.7% from the year-ago period.
Universal Forest Products, Inc. Price, Consensus and EPS Surprise
Net sales of $1.24 billion topped the consensus mark of $1.09 billion by 13.8% and inched up 0.2% on a year-over-year basis. Higher lumber prices resulted in 3% year-over-year growth, offset by a 3% decline in unit sales. Retail sales contributed to overall sales growth, with 3% improvement in April and 47% in June.
New product sales grew 6% year over year, driven by a 16% rise in retail sales.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $609.2 million during the quarter, up 26.4% year over year. Retail unit sales were also up 22% from the year-ago quarter, backed by 72% growth in Home and Decor, 27% rise in ProWood, 23% improvement in Fence, Lawn and Garden, along with 9% increase in UFP-Edge. Selling prices drove the same by 4%.
UFP Industrial: The Industrial segment’s sales totaled $224.4 million, reflecting a decline of 23% from the year-ago period. During the quarter, unit sales fell 27% year over year, partially offset by 4% higher selling prices.
UFP Construction: Sales in the segment were $359.2 million, down 13.4% year over year. A 16% decline in unit sales was partially offset by a 3% increase in selling prices. Unit sales fell in all the segments: 5% in Concrete Forming, 20% in Factory Built, 19% in Commercial and 15% in Site Built.
Notably, both Industrial and Construction showed a steady improvement from April to June.
Operating Highlights
Gross margin of 16.5% improved 140 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 9.2% of net sales — increased 10 bps year over year. EBITDA of $110.4 million increased 22% year over year.
Balance Sheet & Cash Flow
At the end of the quarter, cash and cash equivalents were $200.5 million, significantly up from $20.5 million in the comparable prior-year period. In the past six months, net cash from operating activities totaled $147.2 million compared with $70.9 million in the corresponding period of 2019
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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UFP Industries (UFPI) Q2 Earnings Top Estimates, Stock Up
UFP Industries, Inc.’s (UFPI - Free Report) shares jumped more than 7% in the after-hours trading session on Jul 22, after the company reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products as well as lower costs.
Recently, the company acquired T&R Lumber, a manufacturer and distributer of products primarily used by nurseries, including tree boxes, plastic containers, stakes as well as trellises.
Earnings & Net Sales Discussion
During the reported quarter, UFP Industries reported earnings of $1.08 per share, comfortably surpassing the consensus mark of 63 cents by 71.4% and increasing 22.7% from the year-ago period.
Universal Forest Products, Inc. Price, Consensus and EPS Surprise
Universal Forest Products, Inc. price-consensus-eps-surprise-chart | Universal Forest Products, Inc. Quote
Net sales of $1.24 billion topped the consensus mark of $1.09 billion by 13.8% and inched up 0.2% on a year-over-year basis. Higher lumber prices resulted in 3% year-over-year growth, offset by a 3% decline in unit sales. Retail sales contributed to overall sales growth, with 3% improvement in April and 47% in June.
New product sales grew 6% year over year, driven by a 16% rise in retail sales.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $609.2 million during the quarter, up 26.4% year over year. Retail unit sales were also up 22% from the year-ago quarter, backed by 72% growth in Home and Decor, 27% rise in ProWood, 23% improvement in Fence, Lawn and Garden, along with 9% increase in UFP-Edge. Selling prices drove the same by 4%.
UFP Industrial: The Industrial segment’s sales totaled $224.4 million, reflecting a decline of 23% from the year-ago period. During the quarter, unit sales fell 27% year over year, partially offset by 4% higher selling prices.
UFP Construction: Sales in the segment were $359.2 million, down 13.4% year over year. A 16% decline in unit sales was partially offset by a 3% increase in selling prices. Unit sales fell in all the segments: 5% in Concrete Forming, 20% in Factory Built, 19% in Commercial and 15% in Site Built.
Notably, both Industrial and Construction showed a steady improvement from April to June.
Operating Highlights
Gross margin of 16.5% improved 140 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 9.2% of net sales — increased 10 bps year over year. EBITDA of $110.4 million increased 22% year over year.
Balance Sheet & Cash Flow
At the end of the quarter, cash and cash equivalents were $200.5 million, significantly up from $20.5 million in the comparable prior-year period. In the past six months, net cash from operating activities totaled $147.2 million compared with $70.9 million in the corresponding period of 2019
Zacks Rank
UFP Industries — which shares space with Trex Company, Inc. (TREX - Free Report) , Louisiana-Pacific Corporation (LPX - Free Report) and Weyerhaeuser Company (WY - Free Report) in the Zacks Building Products - Wood industry — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>