We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AZEK's Q4 Earnings & Sales Top Estimates, Adjusted EBITDA Down Y/Y
Read MoreHide Full Article
The AZEK Company Inc. (AZEK - Free Report) reported better-than-expected fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results, wherein adjusted earnings and net sales topped the Zacks Consensus Estimate. However, both metrics declined year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The year-over-year decline in the top-line performance was due to soft contributions from both the reportable segments of the company. Furthermore, the $35 million shift in earlier product purchases by its channel partners in June 2024 to ensure strong service levels, in addition to the adverse effect of the Vycom business sale in its Commercial segment, acted as a headwind.
The bottom line was impacted due to the decline in net sales during the quarter, thereby resulting in a year-over-year decline.
Nonetheless, after the earnings announcement, AZEK stock gained 1.6% in the after-hours trading session on Tuesday. Investors’ sentiments are likely to have been boosted by the incremental fiscal 2025 guidance provided by the company for its key financial metrics.
Inside AZEK’s Numbers
The company reported adjusted earnings per share (EPS) of 29 cents, which surpassed the Zacks Consensus Estimate of 26 cents by 11.5% but declined 12.1% from the year-ago figure of 33 cents.
The AZEK Company Inc. Price, Consensus and EPS Surprise
Net sales of $348.2 million also topped the consensus mark of $337 million by 3.5% but declined 10.4% year over year. Net sales (adjusted), excluding Vycom reconciliation, declined 6.2% year over year.
AZEK’s Segmental Analysis
Residential Segment: This segment’s net sales declined 6.4% year over year to $327.3 million.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) declined year over year by 7.3% to $85.9 million from $92.7 million. The adjusted EBITDA margin also contracted 20 basis points (bps) year over year to 26.3%.
Commercial Segment: The segmental net sales declined 46.5% year over year to $21 million from $39.2 million.
This segment’s adjusted EBITDA declined 37.1% year over year to $5.8 million. However, the adjusted EBITDA margin expanded 410 bps year over year to 27.7%.
Operating Highlights of AZEK
Adjusted gross profit was $133.7 million, down from $149.7 million reported a year ago. Adjusted gross margin contracted 10 bps to 38.4%.
Selling, general and administrative expenses declined year over year to $78.7 million from $85 million.
Consolidated adjusted EBITDA declined to $91.8 million from $102 million on a year-over-year basis. Adjusted EBITDA margin expanded 10 bps year over year to 26.3%.
Sneak Peek at AZEK’s Fiscal 2024 Result
Consolidated net sales during fiscal 2024 increased year over year to $1.44 billion from $1.37 billion. Adjusted EPS increased to $1.20 from 70 cents reported a year ago.
Adjusted EBITDA and adjusted EBITDA margin increased year over year by 33.7% to $379.3 million and 560 bps to 26.3%, respectively.
AZEK’s Financial Operations
As of Sept. 30, 2024, AZEK’s cash and cash equivalents totaled $164 million, down from $278.3 million at the end of fiscal 2023. Long-term debt (less current portion) at the end of fiscal 2024 was $429.7 million, down from $580.3 million at fiscal 2023-end.
During fiscal 2024, net cash provided by operating activities was $224.5 million compared with $362.5 million in the same period last year.
AZEK’s Q1 FY2025 View
For the first quarter of fiscal 2025, the company expects net sales to be in the range of $260-$266 million compared with $240.4 million reported a year ago. Residential segment net sales are expected to be between $247 million and $252 million compared with $223.0 million reported in the first quarter of fiscal 2024.
Adjusted EBITDA is expected to be in the range of $58-$60 million, up from $55.7 million reported a year ago. Adjusted EBITDA margin is anticipated to be approximately 22.4-22.7% compared with 23.2% reported a year ago.
The Residential segment’s adjusted EBITDA is anticipated to be between $57 million and $59 million, up from $52.8 reported a year ago.
Fiscal 2025 Guidance of AZEK
For the full fiscal year, the company expects net sales to be in the range of $1.51-$1.54 billion, reflecting 5-7% year-over-year growth. Residential segment net sales are forecasted to be between $1.439 billion and $1.466 billion, indicating 5-7% year-over-year growth.
Adjusted EBITDA is expected to be in the range of $400-$415 million, reflecting year-over-year growth of 5-9%. Adjusted EBITDA margin is anticipated to be between 26.5% and 27.0% compared with 26.3% in fiscal 2024.
The Residential segment’s adjusted EBITDA is anticipated to be between $388 million and $401 million, indicating 6-10% year-over-year growth.
Capital expenditures are expected to be between $85 million and $95 million.
AECOM (ACM - Free Report) reported impressive results for the fourth quarter of fiscal 2024, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues also increased from the prior year, backed by solid organic net service revenues growth in its design business. The strong improvement was backed by benefits received from high-returning organic growth initiatives.
Apart from this, ACM announced an 18% increase in its quarterly dividend payout to 26 cents, payable on Jan. 17, 2025, to stockholders of record on Jan. 2. Also, it increased its share repurchase authorization to $1 billion. Impressively, AECOM has grown per share dividend at a 20% CAGR since inception.
Fluor Corporation (FLR - Free Report) reported third-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate and declined from the prior year with lower-than-expected contributions from the Energy Solutions segment. Revenues also missed the consensus mark but increased from the previous year.
Fluor's total new awards in the quarter were $2.7 billion compared with $4.98 billion in the year-ago period. The consolidated backlog at the third-quarter end was $31.32 billion, up from $26 billion a year ago. For 2024, it now expects adjusted EPS in the range of $2.55-$2.75 from the prior expectation of $2.50-$3.00.
Owens Corning (OC - Free Report) reported impressive results for the third quarter of 2024, wherein earnings and net sales surpassed the Zacks Consensus Estimate, given the success of its strategic initiatives and structural improvements, leading to strong cash flow and higher margins despite challenging market conditions. This marks the seventh consecutive earnings beat for the company.
Owens Corning’s strategy includes focusing on high-margin products, enhancing operational efficiencies, and divesting lower-margin, capital-intensive businesses (like in China and Korea). This approach is expected to maintain their strong financial performance and position them for growth in 2025 as demand trends stabilize.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
AZEK's Q4 Earnings & Sales Top Estimates, Adjusted EBITDA Down Y/Y
The AZEK Company Inc. (AZEK - Free Report) reported better-than-expected fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results, wherein adjusted earnings and net sales topped the Zacks Consensus Estimate. However, both metrics declined year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The year-over-year decline in the top-line performance was due to soft contributions from both the reportable segments of the company. Furthermore, the $35 million shift in earlier product purchases by its channel partners in June 2024 to ensure strong service levels, in addition to the adverse effect of the Vycom business sale in its Commercial segment, acted as a headwind.
The bottom line was impacted due to the decline in net sales during the quarter, thereby resulting in a year-over-year decline.
Nonetheless, after the earnings announcement, AZEK stock gained 1.6% in the after-hours trading session on Tuesday. Investors’ sentiments are likely to have been boosted by the incremental fiscal 2025 guidance provided by the company for its key financial metrics.
Inside AZEK’s Numbers
The company reported adjusted earnings per share (EPS) of 29 cents, which surpassed the Zacks Consensus Estimate of 26 cents by 11.5% but declined 12.1% from the year-ago figure of 33 cents.
The AZEK Company Inc. Price, Consensus and EPS Surprise
The AZEK Company Inc. price-consensus-eps-surprise-chart | The AZEK Company Inc. Quote
Net sales of $348.2 million also topped the consensus mark of $337 million by 3.5% but declined 10.4% year over year. Net sales (adjusted), excluding Vycom reconciliation, declined 6.2% year over year.
AZEK’s Segmental Analysis
Residential Segment: This segment’s net sales declined 6.4% year over year to $327.3 million.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) declined year over year by 7.3% to $85.9 million from $92.7 million. The adjusted EBITDA margin also contracted 20 basis points (bps) year over year to 26.3%.
Commercial Segment: The segmental net sales declined 46.5% year over year to $21 million from $39.2 million.
This segment’s adjusted EBITDA declined 37.1% year over year to $5.8 million. However, the adjusted EBITDA margin expanded 410 bps year over year to 27.7%.
Operating Highlights of AZEK
Adjusted gross profit was $133.7 million, down from $149.7 million reported a year ago. Adjusted gross margin contracted 10 bps to 38.4%.
Selling, general and administrative expenses declined year over year to $78.7 million from $85 million.
Consolidated adjusted EBITDA declined to $91.8 million from $102 million on a year-over-year basis. Adjusted EBITDA margin expanded 10 bps year over year to 26.3%.
Sneak Peek at AZEK’s Fiscal 2024 Result
Consolidated net sales during fiscal 2024 increased year over year to $1.44 billion from $1.37 billion. Adjusted EPS increased to $1.20 from 70 cents reported a year ago.
Adjusted EBITDA and adjusted EBITDA margin increased year over year by 33.7% to $379.3 million and 560 bps to 26.3%, respectively.
AZEK’s Financial Operations
As of Sept. 30, 2024, AZEK’s cash and cash equivalents totaled $164 million, down from $278.3 million at the end of fiscal 2023. Long-term debt (less current portion) at the end of fiscal 2024 was $429.7 million, down from $580.3 million at fiscal 2023-end.
During fiscal 2024, net cash provided by operating activities was $224.5 million compared with $362.5 million in the same period last year.
AZEK’s Q1 FY2025 View
For the first quarter of fiscal 2025, the company expects net sales to be in the range of $260-$266 million compared with $240.4 million reported a year ago. Residential segment net sales are expected to be between $247 million and $252 million compared with $223.0 million reported in the first quarter of fiscal 2024.
Adjusted EBITDA is expected to be in the range of $58-$60 million, up from $55.7 million reported a year ago. Adjusted EBITDA margin is anticipated to be approximately 22.4-22.7% compared with 23.2% reported a year ago.
The Residential segment’s adjusted EBITDA is anticipated to be between $57 million and $59 million, up from $52.8 reported a year ago.
Fiscal 2025 Guidance of AZEK
For the full fiscal year, the company expects net sales to be in the range of $1.51-$1.54 billion, reflecting 5-7% year-over-year growth. Residential segment net sales are forecasted to be between $1.439 billion and $1.466 billion, indicating 5-7% year-over-year growth.
Adjusted EBITDA is expected to be in the range of $400-$415 million, reflecting year-over-year growth of 5-9%. Adjusted EBITDA margin is anticipated to be between 26.5% and 27.0% compared with 26.3% in fiscal 2024.
The Residential segment’s adjusted EBITDA is anticipated to be between $388 million and $401 million, indicating 6-10% year-over-year growth.
Capital expenditures are expected to be between $85 million and $95 million.
AZEK’s Zacks Rank & Recent Construction Releases
AZEK currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AECOM (ACM - Free Report) reported impressive results for the fourth quarter of fiscal 2024, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues also increased from the prior year, backed by solid organic net service revenues growth in its design business. The strong improvement was backed by benefits received from high-returning organic growth initiatives.
Apart from this, ACM announced an 18% increase in its quarterly dividend payout to 26 cents, payable on Jan. 17, 2025, to stockholders of record on Jan. 2. Also, it increased its share repurchase authorization to $1 billion. Impressively, AECOM has grown per share dividend at a 20% CAGR since inception.
Fluor Corporation (FLR - Free Report) reported third-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate and declined from the prior year with lower-than-expected contributions from the Energy Solutions segment. Revenues also missed the consensus mark but increased from the previous year.
Fluor's total new awards in the quarter were $2.7 billion compared with $4.98 billion in the year-ago period. The consolidated backlog at the third-quarter end was $31.32 billion, up from $26 billion a year ago. For 2024, it now expects adjusted EPS in the range of $2.55-$2.75 from the prior expectation of $2.50-$3.00.
Owens Corning (OC - Free Report) reported impressive results for the third quarter of 2024, wherein earnings and net sales surpassed the Zacks Consensus Estimate, given the success of its strategic initiatives and structural improvements, leading to strong cash flow and higher margins despite challenging market conditions. This marks the seventh consecutive earnings beat for the company.
Owens Corning’s strategy includes focusing on high-margin products, enhancing operational efficiencies, and divesting lower-margin, capital-intensive businesses (like in China and Korea). This approach is expected to maintain their strong financial performance and position them for growth in 2025 as demand trends stabilize.