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UFP Industries Q3 Earnings & Sales Miss Estimates, Decline Y/Y
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UFP Industries, Inc. (UFPI - Free Report) reported tepid results for the third quarter of 2024. Both earnings and net sales missed the Zacks Consensus Estimate and declined year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarterly results were affected by softer demand and broad-based pricing pressures. The company is facing trouble managing the ongoing macroeconomic challenges, aligning its overhead with lower demand levels and eliminating unnecessary costs. Although it is undertaking strategic initiatives and banking on prospective opportunities, the ongoing risks are expected to continue to impact the financial results as it moves into 2025.
Nonetheless, the company aims to obtain more appropriate pricing on strategic acquisitions, invest in new products, automation and technology and pursue organic expansion.
Post the earnings release, UFPI stock gained 1.1% during the trading hours on Monday.
UFPI’s Earnings & Revenue Discussion
UFP Industries reported earnings per share (EPS) of $1.64, which missed the Zacks Consensus Estimate of $1.81 by 9.4% and declined 21.9%% from the year-ago quarter.
UFP Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $1.65 billion also lagged the consensus mark of $1.78 billion by 7.2% and declined 10% year over year. The downside was mainly due to a 7% fall in selling prices and a 3% decline in organic unit sales. New product sales of $119 million contributed 7.2% to total net sales compared with 7.6% in the prior-year quarter.
Segmental Discussion of UFPI
UFP Retail Solutions: The segment reported net sales of $636 million (below our projection of $645.9 million), which declined 13% year over year due to a 7% decline in selling prices and 4% lower organic unit sales. Also, a 2% reduction due to the transfer of certain product sales to the Packaging and Construction segments.
Adjusted EBITDA margin rose 40 basis points (bps) from the prior year to 8%.
UFP Packaging: The segment’s net sales totaled $402 million, down 11% from the year-ago period’s level (below our expectation of $417.5 million). Selling prices declined 8% and organic unit sales were down 5% year over year. This was partially balanced by a 2 percent increase from the transfer of certain product sales from the Retail segment.
Adjusted EBITDA margin contracted 330 bps from the prior year to 8.6%.
UFP Construction: Net sales in the segment were $535 million, which declined 8% from the year-ago period (below our expectation of $604.4 million). The downturn was due to a 7% decrease in selling prices and a 2% decline in organic unit sales. This was partially offset by a 1% increase from the transfer of certain product sales from the Retail segment.
Adjusted EBITDA margin contracted 370 bps from the prior year to 9.5%.
UFPI’s Operating Highlights
Selling, general and administrative expenses — accounting for 11.1% of net sales — increased 40 bps year over year.
Adjusted EBITDA of $164.9 million declined year over year from $207.8 million. Adjusted EBITDA margin also contracted 140 bps from the prior year to 10%.
Balance Sheet & Cash Flow of UFPI
As of Sept. 28, 2024, the company had nearly $2.4 billion in liquidity. Cash and cash equivalents were $1.19 billion at the third-quarter end compared with $1.1 billion at the end of 2023. Long-term debt and finance lease obligations were $232 million, down from $274.8 million at 2023-end. Net cash from operating activities was $497.7 million at the third-quarter end compared with $711.8 million in the year-ago period.
On Oct. 23, 2024, the board of directors approved a quarterly dividend payment of 33 cents per share, a 10% increase from the quarterly dividend of 30 cents per share. The dividend is payable on Dec. 16, 2024, to shareholders of record on Dec. 2.
On July 24, 2024, the board of directors authorized the company to repurchase up to $200 million of shares through July 31, 2025. No shares have been repurchased under this new authorization.
UFPI’s Outlook
UFP Industries continues to expect lumber prices to remain lower in 2024, due to existing supply and demand dynamics.
For the fourth quarter of 2024, the company continues to anticipate demand to decrease in Retail by mid-single digit and while Packaging demand is expected to be down by mid- to high-single digit. It now anticipates a decrease in demand for Construction by low-single digit.
Overall, the company expects softer demand and the competitive pricing environment to continue through the remainder of 2024 and into 2025, resulting in more challenging year-over-year unit sales and profitability comparisons, partially offset by market share gains in each of its segments.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
The quarter’s results were backed by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were headwinds, leverage from the increased top line aided the uptick.
United Rentals, Inc. (URI - Free Report) posted third-quarter 2024 results, wherein its EPS and revenues fell short of the Zacks Consensus Estimate. Nonetheless, both the metrics registered improvement on a year-over-year basis.
The company has tightened the outlook ranges for revenues, adjusted EBITDA, rental capital expenditures and net cash from operating activities while reaffirming the midpoints of its 2024 forecast.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancelation rate increased in the quarter, growth in new orders is encouraging for the company.
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UFP Industries Q3 Earnings & Sales Miss Estimates, Decline Y/Y
UFP Industries, Inc. (UFPI - Free Report) reported tepid results for the third quarter of 2024. Both earnings and net sales missed the Zacks Consensus Estimate and declined year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarterly results were affected by softer demand and broad-based pricing pressures. The company is facing trouble managing the ongoing macroeconomic challenges, aligning its overhead with lower demand levels and eliminating unnecessary costs. Although it is undertaking strategic initiatives and banking on prospective opportunities, the ongoing risks are expected to continue to impact the financial results as it moves into 2025.
Nonetheless, the company aims to obtain more appropriate pricing on strategic acquisitions, invest in new products, automation and technology and pursue organic expansion.
Post the earnings release, UFPI stock gained 1.1% during the trading hours on Monday.
UFPI’s Earnings & Revenue Discussion
UFP Industries reported earnings per share (EPS) of $1.64, which missed the Zacks Consensus Estimate of $1.81 by 9.4% and declined 21.9%% from the year-ago quarter.
UFP Industries, Inc. Price, Consensus and EPS Surprise
UFP Industries, Inc. price-consensus-eps-surprise-chart | UFP Industries, Inc. Quote
Net sales of $1.65 billion also lagged the consensus mark of $1.78 billion by 7.2% and declined 10% year over year. The downside was mainly due to a 7% fall in selling prices and a 3% decline in organic unit sales. New product sales of $119 million contributed 7.2% to total net sales compared with 7.6% in the prior-year quarter.
Segmental Discussion of UFPI
UFP Retail Solutions: The segment reported net sales of $636 million (below our projection of $645.9 million), which declined 13% year over year due to a 7% decline in selling prices and 4% lower organic unit sales. Also, a 2% reduction due to the transfer of certain product sales to the Packaging and Construction segments.
Adjusted EBITDA margin rose 40 basis points (bps) from the prior year to 8%.
UFP Packaging: The segment’s net sales totaled $402 million, down 11% from the year-ago period’s level (below our expectation of $417.5 million). Selling prices declined 8% and organic unit sales were down 5% year over year. This was partially balanced by a 2 percent increase from the transfer of certain product sales from the Retail segment.
Adjusted EBITDA margin contracted 330 bps from the prior year to 8.6%.
UFP Construction: Net sales in the segment were $535 million, which declined 8% from the year-ago period (below our expectation of $604.4 million). The downturn was due to a 7% decrease in selling prices and a 2% decline in organic unit sales. This was partially offset by a 1% increase from the transfer of certain product sales from the Retail segment.
Adjusted EBITDA margin contracted 370 bps from the prior year to 9.5%.
UFPI’s Operating Highlights
Selling, general and administrative expenses — accounting for 11.1% of net sales — increased 40 bps year over year.
Adjusted EBITDA of $164.9 million declined year over year from $207.8 million. Adjusted EBITDA margin also contracted 140 bps from the prior year to 10%.
Balance Sheet & Cash Flow of UFPI
As of Sept. 28, 2024, the company had nearly $2.4 billion in liquidity. Cash and cash equivalents were $1.19 billion at the third-quarter end compared with $1.1 billion at the end of 2023. Long-term debt and finance lease obligations were $232 million, down from $274.8 million at 2023-end.
Net cash from operating activities was $497.7 million at the third-quarter end compared with $711.8 million in the year-ago period.
On Oct. 23, 2024, the board of directors approved a quarterly dividend payment of 33 cents per share, a 10% increase from the quarterly dividend of 30 cents per share. The dividend is payable on Dec. 16, 2024, to shareholders of record on Dec. 2.
On July 24, 2024, the board of directors authorized the company to repurchase up to $200 million of shares through July 31, 2025. No shares have been repurchased under this new authorization.
UFPI’s Outlook
UFP Industries continues to expect lumber prices to remain lower in 2024, due to existing supply and demand dynamics.
For the fourth quarter of 2024, the company continues to anticipate demand to decrease in Retail by mid-single digit and while Packaging demand is expected to be down by mid- to high-single digit. It now anticipates a decrease in demand for Construction by low-single digit.
Overall, the company expects softer demand and the competitive pricing environment to continue through the remainder of 2024 and into 2025, resulting in more challenging year-over-year unit sales and profitability comparisons, partially offset by market share gains in each of its segments.
UFPI’s Zacks Rank & Recent Construction Releases
UFP Industries currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
The quarter’s results were backed by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were headwinds, leverage from the increased top line aided the uptick.
United Rentals, Inc. (URI - Free Report) posted third-quarter 2024 results, wherein its EPS and revenues fell short of the Zacks Consensus Estimate. Nonetheless, both the metrics registered improvement on a year-over-year basis.
The company has tightened the outlook ranges for revenues, adjusted EBITDA, rental capital expenditures and net cash from operating activities while reaffirming the midpoints of its 2024 forecast.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancelation rate increased in the quarter, growth in new orders is encouraging for the company.