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Beacon's (BECN) Q2 Earnings and Revenues Trump Estimates
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Beacon Roofing Supply, Inc. (BECN - Free Report) posted impressive second-quarter fiscal 2021 results. Earnings and revenues surpassed the respective Zacks Consensus Estimate, mainly backed by solid residential backdrop, stronger gross margins and reduced operating expenses.
Julian Francis, Beacon’s president and chief executive officer, said, “Our quarterly results, coupled with the successful divestiture of our Interior Products business, have allowed us to significantly reduce leverage, strengthen our balance sheet and sharpen our focus on the growth and profitability of our exteriors business. We are excited about our progress and look forward to a very successful 2021 as we continue to help our customers build more."
Quarter in Detail
Beacon reported adjusted earnings of 23 cents per share, which topped the consensus mark of 1 cent. In the year-ago period, it incurred a loss of 27 cents a share. Higher revenues and aggressive cost-cutting actions aided the bottom line. Solid residential backdrop and gross margins backed by pricing execution, mix as well as timing bode well. These were partly offset by increased incentive compensation and benefits cost.
Net sales of $1,318 million surpassed the consensus mark of $1,317 million and grew 10.1% year over year on positive contribution from residential roofing as well as complementary products. Also, higher pricing added to the positives, offset by softer demand from non-residential categories.
Sales of residential roofing (accounting for 52.7% of net sales) and complementary products (22.3%) grew 18.7% and 9.4%, respectively, while that of non-residential roofing products (25%) declined 4.1%.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Gross margin of 25.3% improved 270 basis points (bps) year over year for the quarter, courtesy of successful implementation of price increase. Cost-saving efforts and productivity initiatives helped the company bring down operating expenses, thereby driving margins.
As a percentage of net sales, SG&A expenses contracted to 20.3% or 170 bps. Adjusted EBITDA grew 236.7% and adjusted EBITDA margin expanded 380 bps year over year, reflecting strong demand as well as implementation of cost-control strategies.
Cash Position
At fiscal second quarter-end, Beacon had cash and cash equivalents of $619.3 million, down from $624.6 million at fiscal 2020-end. Long-term debt — net of current portion — was $2.08 billion, lower than the fiscal 2020-end figure of $2.49 billion.
Cash used in operating activities was $123.1 million for the first six months of fiscal 2021 versus $150.8 million in the comparable year-ago period.
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Beacon's (BECN) Q2 Earnings and Revenues Trump Estimates
Beacon Roofing Supply, Inc. (BECN - Free Report) posted impressive second-quarter fiscal 2021 results. Earnings and revenues surpassed the respective Zacks Consensus Estimate, mainly backed by solid residential backdrop, stronger gross margins and reduced operating expenses.
Julian Francis, Beacon’s president and chief executive officer, said, “Our quarterly results, coupled with the successful divestiture of our Interior Products business, have allowed us to significantly reduce leverage, strengthen our balance sheet and sharpen our focus on the growth and profitability of our exteriors business. We are excited about our progress and look forward to a very successful 2021 as we continue to help our customers build more."
Quarter in Detail
Beacon reported adjusted earnings of 23 cents per share, which topped the consensus mark of 1 cent. In the year-ago period, it incurred a loss of 27 cents a share. Higher revenues and aggressive cost-cutting actions aided the bottom line. Solid residential backdrop and gross margins backed by pricing execution, mix as well as timing bode well. These were partly offset by increased incentive compensation and benefits cost.
Net sales of $1,318 million surpassed the consensus mark of $1,317 million and grew 10.1% year over year on positive contribution from residential roofing as well as complementary products. Also, higher pricing added to the positives, offset by softer demand from non-residential categories.
Sales of residential roofing (accounting for 52.7% of net sales) and complementary products (22.3%) grew 18.7% and 9.4%, respectively, while that of non-residential roofing products (25%) declined 4.1%.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Beacon Roofing Supply, Inc. price-consensus-eps-surprise-chart | Beacon Roofing Supply, Inc. Quote
Operating Highlights
Gross margin of 25.3% improved 270 basis points (bps) year over year for the quarter, courtesy of successful implementation of price increase. Cost-saving efforts and productivity initiatives helped the company bring down operating expenses, thereby driving margins.
As a percentage of net sales, SG&A expenses contracted to 20.3% or 170 bps. Adjusted EBITDA grew 236.7% and adjusted EBITDA margin expanded 380 bps year over year, reflecting strong demand as well as implementation of cost-control strategies.
Cash Position
At fiscal second quarter-end, Beacon had cash and cash equivalents of $619.3 million, down from $624.6 million at fiscal 2020-end. Long-term debt — net of current portion — was $2.08 billion, lower than the fiscal 2020-end figure of $2.49 billion.
Cash used in operating activities was $123.1 million for the first six months of fiscal 2021 versus $150.8 million in the comparable year-ago period.
Zacks Rank
Beacon — which shares space with Builders FirstSource, Inc. (BLDR - Free Report) , Fastenal Company (FAST - Free Report) and Lumber Liquidators Holdings, Inc. (LL - Free Report) in the Zacks Building Products – Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>