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Builders FirstSource Beats on Q3 Earnings Despite Housing Weakness
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Key Takeaways
BLDR beat Q3 earnings and revenue estimates, though both declined year over year amid housing softness.
Value-added products made up 47.1% of sales, while acquisitions helped offset organic and commodity declines.
Strong free cash flow and $2.1B liquidity enabled $403.6M in buybacks, with $500M still authorized.
Builders FirstSource, Inc. (BLDR - Free Report) delivered better-than-expected third-quarter 2025 results, beating the Zacks Consensus Estimates on both earnings and revenues even as a weak housing backdrop pressured year-over-year comparisons.
Shares of this manufacturer and supplier of building materials gained more than 4% in today’s pre-market trading session.
Builders FirstSource continues to be supported by its increasing value-added product mix (now 47.1% of sales), ongoing digital and operational efficiency initiatives and strategic acquisitions that expand geographic reach and higher-margin offerings. Strong free cash flow provides flexibility to keep investing while returning capital to shareholders. However, the company remains challenged by a below-normal housing starts environment, particularly in single-family and multi-family markets, along with commodity price deflation and reduced operating leverage, which continue to pressure margins and earnings in the near term.
Builders FirstSource, Inc. Price, Consensus and EPS Surprise
Builders FirstSource delivered third-quarter 2025 results that exceeded expectations, even as the U.S. housing market continued to soften. Adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.69, although the figure fell 38.8% from the year-ago period.
GAAP EPS came in at $1.10, representing a 57% decline from last year due to reduced gross profit and higher interest expense. Net income totaled $122.4 million compared with $284.8 million a year earlier.
Revenues of $3.94 billion topped the Zacks Consensus Estimate of $3.8 billion but were still down 6.9% year over year. Lower homebuilding activity weighed heavily, with core organic net sales declining 10.6% and commodity deflation reducing revenue by an additional 1.1%. Acquisitions helped cushion the downturn, contributing 4.8% growth. On a year-over-year basis, Single-Family sales declined 12.1%, Multi-Family 20.2% and Repair and Remodel (R&R)/Other sales 1.2%.
BLDR’s Sales According to Product Category
Value-Added Products, which remain central to the company’s strategy, accounted for 47.1% of total revenue. Within this mix, manufactured products generated $868.4 million, down 14.4% year over year, primarily due to lower single-family starts and reduced multi-family demand. Windows, doors and millwork revenues were $989.9 million, declining 8.9% from the prior-year period as builders moderated purchasing activity aligned with slower new-home cycle dynamics.
Specialty Building Products & Services stood out as the only positively trending category, rising 3.6% year over year to $1.09 billion, supported by acquisitions and continued customer adoption of installation and packaged-service offerings. Meanwhile, Lumber & Lumber Sheet Goods revenue declined 7.9% year over year to $995.6 million, reflecting both commodity price deflation and softer volumes. Despite broad declines, the resilience in value-added categories continues to mitigate margin volatility tied to commodity-driven lines.
Operating Highlights of BLDR
Profitability remained pressured during the quarter. Gross profit decreased 13.5% year over year to $1.2 billion as gross margin contracted 240 basis points to 30.4%. Adjusted EBITDA declined 30.8% year over year to $433.7 million, driving the margin down 380 basis points to 11.0%. Management highlighted that diminished operating leverage from lower starts and a normalization in margin mix were key drivers of year-over-year compression.
Financial Details of BLDR
As of Sept. 30, 2025, Builders FirstSource had cash and cash equivalents of $296.2 million, up from $153.6 million at 2024-end.
Builders FirstSource remained highly cash-generative, producing $547.7 million in operating cash flow and $464.9 million in free cash flow during the quarter. Liquidity stood near $2.1 billion, including $296 million of cash on hand, while long-term debt totaled about $4.43 billion, resulting in a net leverage ratio of 2.3x. The company also returned capital to shareholders, repurchasing $403.6 million of stock in the year-to-date period, with $500 million still authorized for buybacks.
BLDR’s 2025 Guidance Cut
Builders FirstSource reaffirmed its full-year 2025 expectations, calling for net sales between $15.1 billion and $15.4 billion, adjusted EBITDA between $1.625 billion and $1.675 billion, gross margin in the range of 30.1% to 30.5% and free cash flow between $0.8 billion and $1.0 billion. These projections assume approximately 9% lower single-family starts, mid-teens declines in multi-family activity and average commodity prices between $370 and $390 per thousand board feet.
BLDR’s Zacks Rank
Builders FirstSource currently carries a Zacks Rank #5 (Strong Sell).
United Rentals, Inc.’s (URI - Free Report) third-quarter 2025 EPS missed the Zacks Consensus Estimate and revenues beat the same. On a year-over-year basis, the top line increased, but the bottom line declined.
United Rentals reported record third-quarter revenues and adjusted EBITDA, driven by strong demand across construction and industrial end markets. Growth in both general rentals and specialty segments supported the results. Customer optimism, healthy backlogs and seasonal activity contributed to the overall strength. For 2025, United Rentals expects total revenues to be in the range of $16-$16.2 billion compared with $15.8-$16.1 billion expected earlier.
Masco Corporation (MAS - Free Report) posted lackluster third-quarter 2025 results, wherein the adjusted earnings and net sales missed the Zacks Consensus Estimate and tumbled year over year. The quarter’s performance was hurt due to the weak contributions from the Decorative Architectural Products segment, which outweighed the improved performance of the Plumbing Products segment.
The ongoing uncertainties in the global economy and tariff-related risks are restricting Masco’s near-term prospects. Masco expects net sales to be down in low single digits year over year, with an adjusted operating margin of approximately 16.5% (compared with 17.5% in 2024). Adjusted EPS is now expected to be between $3.90 and $3.95, compared with $3.90-$4.10 expected earlier. The revised range compares with the adjusted EPS of $4.10 reported in 2024.
D.R. Horton, Inc. (DHI - Free Report) reported mixed fourth-quarter fiscal 2025 (ended Sept. 30, 2025) results, with earnings missing Zacks Consensus Estimate, while the total revenues beat the same. On a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred D.R. Horton’s quarterly performance, resulting in lower home closings. Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. Nonetheless, D.R. Horton’s strong liquidity, low leverage and national scale offer significant operational and financial flexibility.
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Builders FirstSource Beats on Q3 Earnings Despite Housing Weakness
Key Takeaways
Builders FirstSource, Inc. (BLDR - Free Report) delivered better-than-expected third-quarter 2025 results, beating the Zacks Consensus Estimates on both earnings and revenues even as a weak housing backdrop pressured year-over-year comparisons.
Shares of this manufacturer and supplier of building materials gained more than 4% in today’s pre-market trading session.
Builders FirstSource continues to be supported by its increasing value-added product mix (now 47.1% of sales), ongoing digital and operational efficiency initiatives and strategic acquisitions that expand geographic reach and higher-margin offerings. Strong free cash flow provides flexibility to keep investing while returning capital to shareholders. However, the company remains challenged by a below-normal housing starts environment, particularly in single-family and multi-family markets, along with commodity price deflation and reduced operating leverage, which continue to pressure margins and earnings in the near term.
Builders FirstSource, Inc. Price, Consensus and EPS Surprise
Builders FirstSource, Inc. price-consensus-eps-surprise-chart | Builders FirstSource, Inc. Quote
BLDR’s Earnings & Revenue Discussion
Builders FirstSource delivered third-quarter 2025 results that exceeded expectations, even as the U.S. housing market continued to soften. Adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.69, although the figure fell 38.8% from the year-ago period.
GAAP EPS came in at $1.10, representing a 57% decline from last year due to reduced gross profit and higher interest expense. Net income totaled $122.4 million compared with $284.8 million a year earlier.
Revenues of $3.94 billion topped the Zacks Consensus Estimate of $3.8 billion but were still down 6.9% year over year. Lower homebuilding activity weighed heavily, with core organic net sales declining 10.6% and commodity deflation reducing revenue by an additional 1.1%. Acquisitions helped cushion the downturn, contributing 4.8% growth. On a year-over-year basis, Single-Family sales declined 12.1%, Multi-Family 20.2% and Repair and Remodel (R&R)/Other sales 1.2%.
BLDR’s Sales According to Product Category
Value-Added Products, which remain central to the company’s strategy, accounted for 47.1% of total revenue. Within this mix, manufactured products generated $868.4 million, down 14.4% year over year, primarily due to lower single-family starts and reduced multi-family demand. Windows, doors and millwork revenues were $989.9 million, declining 8.9% from the prior-year period as builders moderated purchasing activity aligned with slower new-home cycle dynamics.
Specialty Building Products & Services stood out as the only positively trending category, rising 3.6% year over year to $1.09 billion, supported by acquisitions and continued customer adoption of installation and packaged-service offerings. Meanwhile, Lumber & Lumber Sheet Goods revenue declined 7.9% year over year to $995.6 million, reflecting both commodity price deflation and softer volumes. Despite broad declines, the resilience in value-added categories continues to mitigate margin volatility tied to commodity-driven lines.
Operating Highlights of BLDR
Profitability remained pressured during the quarter. Gross profit decreased 13.5% year over year to $1.2 billion as gross margin contracted 240 basis points to 30.4%. Adjusted EBITDA declined 30.8% year over year to $433.7 million, driving the margin down 380 basis points to 11.0%. Management highlighted that diminished operating leverage from lower starts and a normalization in margin mix were key drivers of year-over-year compression.
Financial Details of BLDR
As of Sept. 30, 2025, Builders FirstSource had cash and cash equivalents of $296.2 million, up from $153.6 million at 2024-end.
Builders FirstSource remained highly cash-generative, producing $547.7 million in operating cash flow and $464.9 million in free cash flow during the quarter. Liquidity stood near $2.1 billion, including $296 million of cash on hand, while long-term debt totaled about $4.43 billion, resulting in a net leverage ratio of 2.3x. The company also returned capital to shareholders, repurchasing $403.6 million of stock in the year-to-date period, with $500 million still authorized for buybacks.
BLDR’s 2025 Guidance Cut
Builders FirstSource reaffirmed its full-year 2025 expectations, calling for net sales between $15.1 billion and $15.4 billion, adjusted EBITDA between $1.625 billion and $1.675 billion, gross margin in the range of 30.1% to 30.5% and free cash flow between $0.8 billion and $1.0 billion. These projections assume approximately 9% lower single-family starts, mid-teens declines in multi-family activity and average commodity prices between $370 and $390 per thousand board feet.
BLDR’s Zacks Rank
Builders FirstSource currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Releases
United Rentals, Inc.’s (URI - Free Report) third-quarter 2025 EPS missed the Zacks Consensus Estimate and revenues beat the same. On a year-over-year basis, the top line increased, but the bottom line declined.
United Rentals reported record third-quarter revenues and adjusted EBITDA, driven by strong demand across construction and industrial end markets. Growth in both general rentals and specialty segments supported the results. Customer optimism, healthy backlogs and seasonal activity contributed to the overall strength. For 2025, United Rentals expects total revenues to be in the range of $16-$16.2 billion compared with $15.8-$16.1 billion expected earlier.
Masco Corporation (MAS - Free Report) posted lackluster third-quarter 2025 results, wherein the adjusted earnings and net sales missed the Zacks Consensus Estimate and tumbled year over year. The quarter’s performance was hurt due to the weak contributions from the Decorative Architectural Products segment, which outweighed the improved performance of the Plumbing Products segment.
The ongoing uncertainties in the global economy and tariff-related risks are restricting Masco’s near-term prospects. Masco expects net sales to be down in low single digits year over year, with an adjusted operating margin of approximately 16.5% (compared with 17.5% in 2024). Adjusted EPS is now expected to be between $3.90 and $3.95, compared with $3.90-$4.10 expected earlier. The revised range compares with the adjusted EPS of $4.10 reported in 2024.
D.R. Horton, Inc. (DHI - Free Report) reported mixed fourth-quarter fiscal 2025 (ended Sept. 30, 2025) results, with earnings missing Zacks Consensus Estimate, while the total revenues beat the same. On a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred D.R. Horton’s quarterly performance, resulting in lower home closings. Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. Nonetheless, D.R. Horton’s strong liquidity, low leverage and national scale offer significant operational and financial flexibility.