Back to top

Image: Bigstock

Gibraltar (ROCK) Tops Q3 Earnings, Narrows 2017 EPS View

Read MoreHide Full Article

Premium steel & iron firm Gibraltar Industries, Inc. (ROCK - Free Report) reported better-than-expected results for third-quarter 2017. The company also noted that its revenues and profitability in the reported quarter stemmed from the successful implementation of its four-pillar growth strategy, 80/20 simplification projects, strategic innovation investments and integration of the Package Concierge and Nexus buyouts.

Quarter in Details

Earnings

Quarterly adjusted earnings came in at 67 cents per share, beating the Zacks Consensus Estimate of 54 cents. Also, the bottom line recorded 22% year-over-year growth. Notably, the company’s earnings in the quarter exceeded the guidance range of 58-65 cents per share.

Revenues

Net sales in the third quarter came in at $275 million, in line with the Zacks Consensus Estimate. However, the top line came in 0.7% higher than the year-ago tally. Notably, the company’s revenues also came in line with the lower-end of the guidance range of $275-$280 million.

Segmental Details

Revenues of Residential Products segment came in at $130 million during the reported quarter, up 10% year over year. This upside stemmed from the steady recovery of the new housing, repair and remodel construction markets, robust sales of commercial package solutions, as well as benefits from the Package Concierge buyout (February 2017).

Quarterly sales of the Industrial and Infrastructure Products segment came in at $57 million, down 22% year over year. The downtrend came due to divestiture of the company’s U.S. bar grating product line. Notably, turbulent conditions in the infrastructure end markets also marred the segment’s revenues.

Renewable Energy and Conservation segment’s sales were up 7% year over year to $88 million in the quarter, driven by robust domestic business and the Nexus business acquisition (October 2016).

Gibraltar Industries, Inc. Price, Consensus and EPS Surprise

 

Gibraltar Industries, Inc. Price, Consensus and EPS Surprise | Gibraltar Industries, Inc. Quote

Costs and Margins

Cost of sales in the third quarter was $205.8 million, marginally up 0.5% year over year. Gross profit margin in the reported quarter came in at 25%, expanding 10 basis points (bps) year over year.

Selling, general and administrative expenses came in at $33 million compared to $41.4 million incurred in the year-ago period. Interest expenses were down 3.8% year over year. Adjusted operating margin in the quarter was 13.4%, up 170 bps year over year.

Balance Sheet and Cash Flow

Exiting third-quarter 2017, Gibraltar Industries had cash and cash equivalents worth $208 million compared to $170.2 million recorded on Dec 31, 2016. Long-term debt came in at $209.4 million, nearly flat with the figure recorded at the end of 2016.

In the first nine months of 2017, the company generated cash worth $48.8 million from operating activities, as against $102.2 million generated in the prior-year quarter. Capital expenditures came in at $5.2 million, plunging 32.2% year over year.

Outlook

Gibraltar Industries believes favorable market conditions in each segment will likely drive the company’s top- and bottom-line performance in the quarters ahead. However, it expects that the dismal performance of certain end markets might dent its results, going forward.

The company trimmed its revenue guidance for 2017 to the $960-$965 million range from the prior view of $970-$980 million. Also, the adjusted earnings guidance for 2017 has been narrowed to the $1.60-$1.67 per share range from the previous projection of $1.57-$1.70 per share.

Stocks to Consider

Gibraltar Industries currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are listed below:

EMCOR Group, Inc. (EME - Free Report) currently sports a Zacks Rank of 1 (Strong Buy) and has a positive average earnings surprise of 16.96% for the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boise Cascade, L.L.C. (BCC - Free Report) carries a Zacks Rank of 2 (Buy) and pulled off an outstanding positive average earnings surprise of 116.28% over the trailing four quarters.

Beazer Homes USA, Inc. (BZH - Free Report) also holds a Zacks Rank of 2 and generated a remarkable positive average earnings surprise of 103.47% during the same time frame.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Published in