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Gibraltar (ROCK) Beats on Q3 Earnings, Raises Guidance
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Premium steel and iron company, Gibraltar Industries, Inc. (ROCK - Free Report) reported mixed third-quarter 2016 results.
Quarterly adjusted earnings of 55 cents per share handily beat the Zacks Consensus Estimate and the year-ago tally of 50 cents.
The upside was driven by a stronger RBI business, greater operational efficiency and optimal utilization of productive resources.
Performance in Details
Gibraltar Industries’ net sales were $272.7 million in the quarter, down 10.6% year over year. The top line also missed the Zacks Consensus Estimate of $276 million.
Gross profit margin expanded 480 basis points (bps) to 24.9%. Selling, general and administrative (SG&A) expenses were $41.5 million, up from $38 million in the prior-year quarter. Gibraltar Industries reported adjusted operating margin of 11.7% in the quarter, up 230 bps year over year.
Segment Details
Residential Products segment generated revenues of $118 million, down 7% year over year. Segmental sales declined due to lower sale of postal products.
Adjusted operating margin was 17.2%, up 270 bps year over year. The improvement was attributable to greater operational efficiency, accomplishment of the centralized mailbox contract and early receivables from the 80/20 simplification plan.
Industrial and Infrastructure Products yielded revenues of $73 million, down 24% year over year. The decline stemmed from the divestiture of the company’s industrial business in Europe, lower volume of orders from energy-related markets, construction postponements for major infrastructure projects and augmented competition in pricing.
The segment’s adjusted operating margin was 7%, down 140 bps year over year. The downside was witnessed due to reduced volumes and weaker customer pricing (as cost of raw materials increased).
The Renewable Energy & Conservation segment’s revenues came in at $82 million in the quarter under review, flat year over year.
The segment’s adjusted operating margin was 20.0% against 9.5% reported in the year-ago tally. The upside was driven by greater operational efficacy and benefits accrued from raw input sourcing, tactical make-versus-buy decisions and freight management activities.
Other Financial Aspects
Gibraltar Industries exited the third quarter with cash and cash equivalents of $173.1 million, up from $68.9 million at year-end 2015. Long-term debt was $209 million, up 0.05% from $208.9 million recorded 2015-end.
In the quarter under review, Gibraltar Industries generated $101.2 million of cash from operating activities compared with $44.5 million generated in the year-ago comparable period. Capital expenditure was $7.6 million, up from $6.8 million in the year-ago quarter.
New Acquisition
In Oct 11, 2016, Gibraltar Industries closed the acquisition of Nexus Corporation. This transaction would fortify the company’s RBI greenhouse business. This, in turn, will drive its Renewable Energy and Conservation segments’ revenues going ahead.
Outlook
Gibraltar Industries aims to attain a market leading position in the U.S. commercial greenhouse market on the Nexus Corporation buy.
The company aims to improve its results through a new four-pillar growth strategy. This program involves operational improvements, product innovation, strategic acquisitions and superior portfolio management. The company intends to enhance its profitability through its 80/20 simplification scheme.
Gibraltar Industries also believes that its balance sheet and robust cash position would support its inorganic growth programs in the future.
On grounds of the above mentioned bullish aspects, the company has raised its full-year 2016 adjusted earnings within the range of $1.57-$1.61 per share from $1.37-$1.47 per share previously stated. The company projects revenues in the range of $1.02–$1.03 million for 2016.
Armstrong World Industries, Inc. (AWI - Free Report) currently holds a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 1.87% over the last four quarters.
DR Horton Inc. (DHI - Free Report) currently has a Zacks Rank #2 and has an average positive earnings surprise of 3.47% over the trailing four quarters.
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Gibraltar (ROCK) Beats on Q3 Earnings, Raises Guidance
Premium steel and iron company, Gibraltar Industries, Inc. (ROCK - Free Report) reported mixed third-quarter 2016 results.
Quarterly adjusted earnings of 55 cents per share handily beat the Zacks Consensus Estimate and the year-ago tally of 50 cents.
The upside was driven by a stronger RBI business, greater operational efficiency and optimal utilization of productive resources.
Performance in Details
Gibraltar Industries’ net sales were $272.7 million in the quarter, down 10.6% year over year. The top line also missed the Zacks Consensus Estimate of $276 million.
Gross profit margin expanded 480 basis points (bps) to 24.9%. Selling, general and administrative (SG&A) expenses were $41.5 million, up from $38 million in the prior-year quarter. Gibraltar Industries reported adjusted operating margin of 11.7% in the quarter, up 230 bps year over year.
Segment Details
Residential Products segment generated revenues of $118 million, down 7% year over year. Segmental sales declined due to lower sale of postal products.
Adjusted operating margin was 17.2%, up 270 bps year over year. The improvement was attributable to greater operational efficiency, accomplishment of the centralized mailbox contract and early receivables from the 80/20 simplification plan.
Industrial and Infrastructure Products yielded revenues of $73 million, down 24% year over year. The decline stemmed from the divestiture of the company’s industrial business in Europe, lower volume of orders from energy-related markets, construction postponements for major infrastructure projects and augmented competition in pricing.
The segment’s adjusted operating margin was 7%, down 140 bps year over year. The downside was witnessed due to reduced volumes and weaker customer pricing (as cost of raw materials increased).
The Renewable Energy & Conservation segment’s revenues came in at $82 million in the quarter under review, flat year over year.
The segment’s adjusted operating margin was 20.0% against 9.5% reported in the year-ago tally. The upside was driven by greater operational efficacy and benefits accrued from raw input sourcing, tactical make-versus-buy decisions and freight management activities.
Other Financial Aspects
Gibraltar Industries exited the third quarter with cash and cash equivalents of $173.1 million, up from $68.9 million at year-end 2015. Long-term debt was $209 million, up 0.05% from $208.9 million recorded 2015-end.
In the quarter under review, Gibraltar Industries generated $101.2 million of cash from operating activities compared with $44.5 million generated in the year-ago comparable period. Capital expenditure was $7.6 million, up from $6.8 million in the year-ago quarter.
New Acquisition
In Oct 11, 2016, Gibraltar Industries closed the acquisition of Nexus Corporation. This transaction would fortify the company’s RBI greenhouse business. This, in turn, will drive its Renewable Energy and Conservation segments’ revenues going ahead.
Outlook
Gibraltar Industries aims to attain a market leading position in the U.S. commercial greenhouse market on the Nexus Corporation buy.
The company aims to improve its results through a new four-pillar growth strategy. This program involves operational improvements, product innovation, strategic acquisitions and superior portfolio management. The company intends to enhance its profitability through its 80/20 simplification scheme.
Gibraltar Industries also believes that its balance sheet and robust cash position would support its inorganic growth programs in the future.
On grounds of the above mentioned bullish aspects, the company has raised its full-year 2016 adjusted earnings within the range of $1.57-$1.61 per share from $1.37-$1.47 per share previously stated. The company projects revenues in the range of $1.02–$1.03 million for 2016.
GIBRALTAR INDUS Price, Consensus and EPS Surprise
GIBRALTAR INDUS Price, Consensus and EPS Surprise | GIBRALTAR INDUS Quote
Zacks Rank and Other Stocks
Gibraltar Industries currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks within the industry that warrant a look include:
Argan, Inc. (AGX - Free Report) currently sports a Zacks Rank #1 (Strong Buy) and has an average positive earnings surprise of 13.26% over the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Armstrong World Industries, Inc. (AWI - Free Report) currently holds a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 1.87% over the last four quarters.
DR Horton Inc. (DHI - Free Report) currently has a Zacks Rank #2 and has an average positive earnings surprise of 3.47% over the trailing four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>