Gibraltar Industries, Inc. (ROCK - Analyst Report) reported adjusted earnings per share of 26 cents in the second quarter of 2013, down 7.1% from 28 cents in the year-ago quarter. It also missed the Zacks Consensus Estimate of 31 cents by 16.1%. The decrease in earnings is attributed to lower-than-expected revenues in the quarter.
On a GAAP basis, Gibraltar reported earnings of 25 cents per share, declining by a penny year over year.
Revenues: In the reported quarter, net sales were $224.5 million, up 2.2% year over year. The year-over-year increase in revenues was primarily due to accretive acquisitions, offset by a reduction in organic sales. However, revenues comprehensively missed the Zacks Consensus Estimate of $243.0 million.
Gibraltar’s repair and remodeling activities in infrastructure as well as residential and low-rise commercial buildings markets were below expectations, leading to a 5.0% decline in organic revenues.
Costs/Margins: Adjusted gross profit margin in the quarter increased 70 basis points to 20.2%. Adjusted selling, general and administrative (SG&A) expenses for the quarter were $28.3 million, compared with $25.4 million in the year-ago comparable quarter.
Gibraltar’s adjusted operating margin of 7.6% decreased from 8.0% reported in the year-ago comparable quarter due to a hike in operating expenses.
Balance Sheet/Cash Flow: Exiting the second quarter of 2013, Gibraltar’s cash and cash equivalents were approximately $44.6 million, compared with $30.3 million in the previous quarter. Total long-term debt balance dropped marginally to $213.6 million against $214.0 million in the preceding quarter.
For the six months ended Jun 30, 2013, Gibraltar generated cash from operations of $5.3 million, against cash used in operations of $2.0 million in the six months ended Jun 30, 2012. Capital expenditure incurred in the first half of 2013 totaled $4.7 million versus $4.6 million in the year-ago comparable period.
Outlook: Gibraltar experienced lower-than-expected demand in the first half of 2013. Although the company expects its acquired businesses to contribute significantly to revenues in the coming quarters, it is a tad bearish about organic growth in revenues. It is also expected that Gibraltar’s high revenue earner, industrial markets, will face weakness in demand and pricing in the coming quarters. As a result, in 2013, the company expects margins and earnings to fall below 2012 levels, with a modest increase in sales, led by acquisitions. Earnings per share in 2013 are expected to be in the range of 54 cents to 64 cents.
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Gibraltar currently carries a Zacks Rank #4 (Sell).