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North American Construction (NOA) Q4 Earnings Miss Estimates
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North American Construction Group Ltd. (NOA - Free Report) , or NACG, reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. On a year-over-year basis, the top line increased, but the bottom line declined.
Following the results, NACG’s stock declined 7.9% in the after-hour trading session on Mar 13, 2024.
On Oct 1, 2023, the company finalized the acquisition of the MacKellar Group. As a result, Australia experienced three months of robust equipment utilization. This quarter yielded significant operating results, marking a notable shift in geographic diversification.
Inside the Numbers
During fourth-quarter 2023, NACG reported adjusted earnings per share (EPS) of 87 cents in Canadian dollars, which translates to approximately 64 cents in US dollars. The reported figure missed the Zacks Consensus Estimate of 70 cents. The company reported an adjusted EPS of C$1.1 in the prior-year quarter.
North American Construction Group Ltd. Price, Consensus and EPS Surprise
The company generated revenues of C$326.3 million, which translates to approximately $240 million in US dollars. The reported figure surpassed the Zacks Consensus Estimate of $229.3 million and increased 39.8% year over year. The positive performance can be attributed to the acquisition of MacKellar.
Operating Highlights
Gross profit during the quarter surged 53.7% from the prior-year quarter’s levels to C$65.5 million. Gross margin expanded 190 basis points (bps) to 20.1% due to the acquisition of MacKellar, which generated a gross profit of 23.7% in the quarter.
General and administrative expenses (excluding stock-based compensation), as a percentage of revenues, improved 290 bps to 5.7% from the prior-year figure of 2.8%.
The company’s operating income was C$45.8 million during the quarter, up from C$31.6 million in the prior-year period. Operating margin was 14%, up 50 bps from the prior-year figure of 13.5%.
The company’s adjusted EBITDA margin declined 170 bps to 25.1%, despite a year-over-year increase of 17.8% in adjusted EBITDA to C$101.1 million.
2023 Highlights
Revenues in 2023 came in at C$957.2 million, up 24.4% from C$769.5 million in 2022.
Adjusted EBITDA totaled C$297 million compared with C$245.4 million a year ago. The company expected adjusted EBITDA to be in the range of C$295-C$310 million.
Financial Highlights
As of Dec 31, 2023, the company had a cash balance of C$88.6 million compared with C$69.1 million at 2022-end. Long-term debt was C$611.3 million, up from C$378.5 million at 2022-end.
Cash provided by operating activities in fourth-quarter 2023 was C$160.9 million, up from C$78.1 million reported in the year-ago quarter.
2024 Guidance
For 2024, NACG expects combined revenues in the range of C$1.5-C$1.7 billion, up 23.1% from the previous year’s levels, considering the mid-point.
It anticipates adjusted EBITDA within C$430-C$470 million, up 51.5% year over year.
Zacks Rank & Key Rank
NACG currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks in the Zacks Construction sector are:
NVR delivered a trailing four-quarter earnings surprise of 8.1%, on average. The Zacks Consensus Estimate for NVR’s 2024 sales and EPS indicates growth of 7.7% and 4.6%, respectively, from the prior-year levels.
Summit Materials, Inc. (SUM - Free Report) currently sports a Zacks Rank of 1. SUM delivered a trailing four-quarter earnings surprise of 18.2%, on average. The stock has gained 31.2% in the past six months.
The Zacks Consensus Estimate for SUM’s 2024 sales and EPS indicates growth of 80.2% and 53.2%, respectively, from a year ago.
Century Communities, Inc. (CCS - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 49.2%, on average. Shares of CCS have rallied 27.4% in the past six months.
The Zacks Consensus Estimate for CCS’ 2024 sales and EPS indicates a rise of 11.1% and 24.4%, respectively, from the prior-year levels.
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North American Construction (NOA) Q4 Earnings Miss Estimates
North American Construction Group Ltd. (NOA - Free Report) , or NACG, reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. On a year-over-year basis, the top line increased, but the bottom line declined.
Following the results, NACG’s stock declined 7.9% in the after-hour trading session on Mar 13, 2024.
On Oct 1, 2023, the company finalized the acquisition of the MacKellar Group. As a result, Australia experienced three months of robust equipment utilization. This quarter yielded significant operating results, marking a notable shift in geographic diversification.
Inside the Numbers
During fourth-quarter 2023, NACG reported adjusted earnings per share (EPS) of 87 cents in Canadian dollars, which translates to approximately 64 cents in US dollars. The reported figure missed the Zacks Consensus Estimate of 70 cents. The company reported an adjusted EPS of C$1.1 in the prior-year quarter.
North American Construction Group Ltd. Price, Consensus and EPS Surprise
North American Construction Group Ltd. price-consensus-eps-surprise-chart | North American Construction Group Ltd. Quote
The company generated revenues of C$326.3 million, which translates to approximately $240 million in US dollars. The reported figure surpassed the Zacks Consensus Estimate of $229.3 million and increased 39.8% year over year. The positive performance can be attributed to the acquisition of MacKellar.
Operating Highlights
Gross profit during the quarter surged 53.7% from the prior-year quarter’s levels to C$65.5 million. Gross margin expanded 190 basis points (bps) to 20.1% due to the acquisition of MacKellar, which generated a gross profit of 23.7% in the quarter.
General and administrative expenses (excluding stock-based compensation), as a percentage of revenues, improved 290 bps to 5.7% from the prior-year figure of 2.8%.
The company’s operating income was C$45.8 million during the quarter, up from C$31.6 million in the prior-year period. Operating margin was 14%, up 50 bps from the prior-year figure of 13.5%.
The company’s adjusted EBITDA margin declined 170 bps to 25.1%, despite a year-over-year increase of 17.8% in adjusted EBITDA to C$101.1 million.
2023 Highlights
Revenues in 2023 came in at C$957.2 million, up 24.4% from C$769.5 million in 2022.
Adjusted EBITDA totaled C$297 million compared with C$245.4 million a year ago. The company expected adjusted EBITDA to be in the range of C$295-C$310 million.
Financial Highlights
As of Dec 31, 2023, the company had a cash balance of C$88.6 million compared with C$69.1 million at 2022-end. Long-term debt was C$611.3 million, up from C$378.5 million at 2022-end.
Cash provided by operating activities in fourth-quarter 2023 was C$160.9 million, up from C$78.1 million reported in the year-ago quarter.
2024 Guidance
For 2024, NACG expects combined revenues in the range of C$1.5-C$1.7 billion, up 23.1% from the previous year’s levels, considering the mid-point.
It anticipates adjusted EBITDA within C$430-C$470 million, up 51.5% year over year.
Zacks Rank & Key Rank
NACG currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks in the Zacks Construction sector are:
NVR, Inc. (NVR - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). The stock has gained 27.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVR delivered a trailing four-quarter earnings surprise of 8.1%, on average. The Zacks Consensus Estimate for NVR’s 2024 sales and EPS indicates growth of 7.7% and 4.6%, respectively, from the prior-year levels.
Summit Materials, Inc. (SUM - Free Report) currently sports a Zacks Rank of 1. SUM delivered a trailing four-quarter earnings surprise of 18.2%, on average. The stock has gained 31.2% in the past six months.
The Zacks Consensus Estimate for SUM’s 2024 sales and EPS indicates growth of 80.2% and 53.2%, respectively, from a year ago.
Century Communities, Inc. (CCS - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 49.2%, on average. Shares of CCS have rallied 27.4% in the past six months.
The Zacks Consensus Estimate for CCS’ 2024 sales and EPS indicates a rise of 11.1% and 24.4%, respectively, from the prior-year levels.