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Gibraltar Industries, Inc. (ROCK - Free Report) reported impressive earnings in the fourth quarter of 2022. Earnings not only surpassed the Zacks Consensus Estimate but also increased on a year-over-year basis.
However, net sales declined from the previous year and missed the consensus mark. Shares of the company inched up 0.4% on Feb 22, post-earnings release.
Looking forward, Mr. Bosway said, “We are well prepared for what will continue to be a fluid external environment and we expect that the Residential market will return to normal demand seasonality, panel supply for the solar industry will improve in the second half of the year, and Agtech projects for produce growing will get finalized. The long-term fundamentals of our end markets remain strong, and given the progress we made in the last 12 months in our market positioning, systems, processes, and organization, we expect to drive solid performance in 2023 as we continue to execute toward our 2025 objectives.”
Inside the Headlines
Gibraltar reported adjusted earnings of 72 cents per share, which topped the Zacks Consensus Estimate of 71 by 1.4% and increased 28.6% year over year from 56 cents. This was driven by strong contributions from the Renewables and Infrastructure segments, backed by material cost alignment, field operations efficiency, price management, business mix, 80/20 initiatives and the share repurchase program.
Gibraltar Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $313.86 million lagged the consensus mark of $390.79 million by 3.2% and decreased 6.1% from the prior year’s levels of $334.45 million. On an adjusted basis, the top line declined 5.2% year over year to $312.9 million and organically by 9.8%. The decline was due to lower Residential, Renewables and Agtech businesses’ revenues. Yet, acquisition of Quality Aluminum Products (“QAP”) and demand in the Infrastructure segment aided the top line.
Segmental Details
Renewable Energy: Net sales in the segment decreased 20.8% from the year-ago quarter’s levels to $86.1 million. The backlog was down 17% year over year. Despite strong customer demand for products and services, negative impacts of the U.S. solar industry, especially on scoping and scheduling of projects, ailed the segment’s results.
Adjusted operating margin of 15.2% expanded a whopping 1,390 basis points (bps) year over year and 230 bps sequentially, driven by field operations productivity, 80/20 project management, business mix and material productivity. Adjusted EBITDA margin increased 1,440 bps from the prior-year quarter’s levels to 17.9%.
Residential Products: Net sales in the segment increased 7.8% year over year to $171.9 million. Acquisition of QAP contributed 9.4% to the segment’s sales growth. Organic revenue remained challenged as the market returned to its typical lower seasonal demand patterns.
Adjusted operating margins of 13.4% contracted 320 bps in the quarter. The alignment of price and material cost and the timing of changes in commodity indexes as well as QAP buyout impacted margin. Adjusted EBITDA margin fell 300 bps from the prior-year quarter’s levels to 15.1%.
Agtech: Sales declined 22.7% year over year to $38.5 million and adjusted sales fell 17.4% to $37.6 million. The downside was due to the rescoping and rescheduling of several produce-growing projects into 2023. Backlogs were down 13% from the year-ago quarter’s levels.
Adjusted operating margins declined 420 bps year over year to 4.6%. Adjusted EBITDA margin was down 350 bps year over year to 7.6%.
Infrastructure: Sales in the segment rose 4.8% year over year to $17.3 million. Backlog rose 23% year over year as bidding activity continued to be very strong. The company expects the infrastructure bill to have a positive impact in 2023.
Adjusted operating margins of 13.7% expanded 720 bps year over year, driven by price-material cost alignment, volume leverage, positive mix and improved operating execution. Adjusted EBITDA margin expanded 700 bps from the prior-year quarter’s tally to 18.5%.
Operating Highlights
In the reported quarter, gross profit increased to $69 million from $65.8 million reported a year ago. Adjusted operating margin expanded 190 bps year over year to 10%. Adjusted EBITDA margin also increased 240 bps from the prior year to 12.8%.
2022 Highlights
Net sales for the year came in at $1.39 billion, up 29.8% from $1.34 billion in 2021. Adjusted sales grew 4.7% to $1.38 billion. Adjusted earnings totaled $3.40, up 18.9% from $2.86 in the previous year.
Adjusted operating and adjusted EBITDA margins expanded by 120 bps, each, year over year. Order backlog declined 12% from 2021.
Balance Sheet & Cash Flow
As of Dec 31, 2022, Gibraltar had liquidity of $322 million, including cash and cash equivalents worth $17.6 million, up from $12.8 million at the 2021-end. Long-term debt was $88.8 million, up from $23.8 million as of Dec 31, 2021.
In 2022, net cash provided by operating activities totaled $102.7 million versus $23.1 million in 2021. In 2022, the company repurchased 663,913 shares for $30.3 million at an average price of $45.69 per share.
2023 Guidance
Gibraltar expects revenues to be $1.36-$1.41 billion. Adjusted earnings are expected to be in the range of $3.46-$3.66 per share.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. However, sales declined from the year-ago quarter’s figure and lagged the consensus mark.
For 2022, OTIS expects adjusted net sales to be within $13.4-$13.5 billion, lower than the $13.6-$13.8 billion projected earlier. Adjusted earnings per share are anticipated to be $3.11-$3.15, suggesting 5-7% year-over-year growth. This is down from the prior projection of $3.17-$3.21 per share.
TopBuild Corp. (BLD - Free Report) reported stellar results for third-quarter 2022. Its earnings and revenues surpassed their respective Zacks Consensus Estimate and improved significantly on a year-over-year basis. Solid contributions from all three end markets that BLD serves (residential, commercial and industrial), along with operational efficiency, drove the results.
For 2022, TopBuild expects sales between $4.95 billion and $5 billion versus $4.8-$4.9 billion expected earlier. The estimated figure indicates an increase from $3.49 billion. Adjusted EBITDA is projected within $915-$935 million compared with $860-$900 million projected earlier. This suggests growth from $605.9 million reported in 2021.
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Gibraltar (ROCK) Q4 Earnings Top, Backlog Fall, '23 Views Strong
Gibraltar Industries, Inc. (ROCK - Free Report) reported impressive earnings in the fourth quarter of 2022. Earnings not only surpassed the Zacks Consensus Estimate but also increased on a year-over-year basis.
However, net sales declined from the previous year and missed the consensus mark. Shares of the company inched up 0.4% on Feb 22, post-earnings release.
Looking forward, Mr. Bosway said, “We are well prepared for what will continue to be a fluid external environment and we expect that the Residential market will return to normal demand seasonality, panel supply for the solar industry will improve in the second half of the year, and Agtech projects for produce growing will get finalized. The long-term fundamentals of our end markets remain strong, and given the progress we made in the last 12 months in our market positioning, systems, processes, and organization, we expect to drive solid performance in 2023 as we continue to execute toward our 2025 objectives.”
Inside the Headlines
Gibraltar reported adjusted earnings of 72 cents per share, which topped the Zacks Consensus Estimate of 71 by 1.4% and increased 28.6% year over year from 56 cents. This was driven by strong contributions from the Renewables and Infrastructure segments, backed by material cost alignment, field operations efficiency, price management, business mix, 80/20 initiatives and the share repurchase program.
Gibraltar Industries, Inc. Price, Consensus and EPS Surprise
Gibraltar Industries, Inc. price-consensus-eps-surprise-chart | Gibraltar Industries, Inc. Quote
Net sales of $313.86 million lagged the consensus mark of $390.79 million by 3.2% and decreased 6.1% from the prior year’s levels of $334.45 million. On an adjusted basis, the top line declined 5.2% year over year to $312.9 million and organically by 9.8%. The decline was due to lower Residential, Renewables and Agtech businesses’ revenues. Yet, acquisition of Quality Aluminum Products (“QAP”) and demand in the Infrastructure segment aided the top line.
Segmental Details
Renewable Energy: Net sales in the segment decreased 20.8% from the year-ago quarter’s levels to $86.1 million. The backlog was down 17% year over year. Despite strong customer demand for products and services, negative impacts of the U.S. solar industry, especially on scoping and scheduling of projects, ailed the segment’s results.
Adjusted operating margin of 15.2% expanded a whopping 1,390 basis points (bps) year over year and 230 bps sequentially, driven by field operations productivity, 80/20 project management, business mix and material productivity. Adjusted EBITDA margin increased 1,440 bps from the prior-year quarter’s levels to 17.9%.
Residential Products: Net sales in the segment increased 7.8% year over year to $171.9 million. Acquisition of QAP contributed 9.4% to the segment’s sales growth. Organic revenue remained challenged as the market returned to its typical lower seasonal demand patterns.
Adjusted operating margins of 13.4% contracted 320 bps in the quarter. The alignment of price and material cost and the timing of changes in commodity indexes as well as QAP buyout impacted margin. Adjusted EBITDA margin fell 300 bps from the prior-year quarter’s levels to 15.1%.
Agtech: Sales declined 22.7% year over year to $38.5 million and adjusted sales fell 17.4% to $37.6 million. The downside was due to the rescoping and rescheduling of several produce-growing projects into 2023. Backlogs were down 13% from the year-ago quarter’s levels.
Adjusted operating margins declined 420 bps year over year to 4.6%. Adjusted EBITDA margin was down 350 bps year over year to 7.6%.
Infrastructure: Sales in the segment rose 4.8% year over year to $17.3 million. Backlog rose 23% year over year as bidding activity continued to be very strong. The company expects the infrastructure bill to have a positive impact in 2023.
Adjusted operating margins of 13.7% expanded 720 bps year over year, driven by price-material cost alignment, volume leverage, positive mix and improved operating execution. Adjusted EBITDA margin expanded 700 bps from the prior-year quarter’s tally to 18.5%.
Operating Highlights
In the reported quarter, gross profit increased to $69 million from $65.8 million reported a year ago. Adjusted operating margin expanded 190 bps year over year to 10%. Adjusted EBITDA margin also increased 240 bps from the prior year to 12.8%.
2022 Highlights
Net sales for the year came in at $1.39 billion, up 29.8% from $1.34 billion in 2021. Adjusted sales grew 4.7% to $1.38 billion. Adjusted earnings totaled $3.40, up 18.9% from $2.86 in the previous year.
Adjusted operating and adjusted EBITDA margins expanded by 120 bps, each, year over year. Order backlog declined 12% from 2021.
Balance Sheet & Cash Flow
As of Dec 31, 2022, Gibraltar had liquidity of $322 million, including cash and cash equivalents worth $17.6 million, up from $12.8 million at the 2021-end. Long-term debt was $88.8 million, up from $23.8 million as of Dec 31, 2021.
In 2022, net cash provided by operating activities totaled $102.7 million versus $23.1 million in 2021. In 2022, the company repurchased 663,913 shares for $30.3 million at an average price of $45.69 per share.
2023 Guidance
Gibraltar expects revenues to be $1.36-$1.41 billion. Adjusted earnings are expected to be in the range of $3.46-$3.66 per share.
Zacks Rank & Peer Releases
Gibraltar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. However, sales declined from the year-ago quarter’s figure and lagged the consensus mark.
For 2022, OTIS expects adjusted net sales to be within $13.4-$13.5 billion, lower than the $13.6-$13.8 billion projected earlier. Adjusted earnings per share are anticipated to be $3.11-$3.15, suggesting 5-7% year-over-year growth. This is down from the prior projection of $3.17-$3.21 per share.
TopBuild Corp. (BLD - Free Report) reported stellar results for third-quarter 2022. Its earnings and revenues surpassed their respective Zacks Consensus Estimate and improved significantly on a year-over-year basis. Solid contributions from all three end markets that BLD serves (residential, commercial and industrial), along with operational efficiency, drove the results.
For 2022, TopBuild expects sales between $4.95 billion and $5 billion versus $4.8-$4.9 billion expected earlier. The estimated figure indicates an increase from $3.49 billion. Adjusted EBITDA is projected within $915-$935 million compared with $860-$900 million projected earlier. This suggests growth from $605.9 million reported in 2021.