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UFP Industries (UFPI) Q4 Earnings Top Estimates, Margins Up
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UFP Industries, Inc. (UFPI - Free Report) reported strong earnings in fourth-quarter 2019 on the back of increased unit sales, its ability to leverage fixed costs, and improved sales of higher-margin, value-added products that comprise a greater portion of its product mix. The company’s bottom line not only surpassed the Zacks Consensus Estimate but also increased year over year. Notably, this was the best fourth-quarter performance in the company’s history.
The stock inched up 0.4% in the after-hour trading session on Feb 19.
On Feb 3, 2020, it announced changes in the frequency of dividend payments from semi-annual to quarterly. Also, it raised quarterly cash dividend by 25% to 12.5 cents a share, payable on Mar 15, 2020 to its shareholders of record on Mar 1, 2020.
Earnings & Net sales Discussion
The company’s earnings of 61 cents per share topped the consensus estimate of 59 cents by 3.4%. Also, the reported figure increased 19.6% from 54 cents reported in the year-ago period.
UFP Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $998 million marginally missed the consensus mark of $998.8 million but grew 1% on a year-over-year basis from $988.2 million. Lower lumber prices reduced gross sales by 5%.
End-Market Sales Discussion
UFP Industries classifies top-line results on the basis of end-markets served. Investors should note that UFP Industries’ end-market sales sum up to total gross sales. Gross sales during the reported quarter came in at $1,012 million, up 1% from the year-ago period.
UFP Retail: The segment’s sales increased 7% year over year to $323.3 million during the quarter. Retail unit sales were up 10% on the back of new product growth and market share gains. However, lower selling prices partially offset the same by 3%.
UFP Industrial: The Industrial segment’s sales totaled $309.7 million, reflecting a decline of 4% from the year-ago period. During the quarter, unit sales increased 2%, offset by 6% lower lumber pricing. The unit sales growth was attributed to acquisitions.
UFP Construction: Sales in the segment were $379 million, up 1% year over year. A 5% improvement in unit sales was partially offset by 4% decrease in selling prices. Unit sales in commercial, manufactured housing and residential customers grew 9%, 4%, and 3%, respectively, during the quarter.
Operating Highlights
Cost of goods sold, as a percentage of net sales, contracted 190 basis points (bps) from the year-ago quarter to 84.2%. Gross margin of 15.8% improved 190 bps year over year.
Selling, general and administrative expenses, accounting for 10.5% of net sales, increased 120 bps year over year. Operating margin in the quarter improved 60 bps to 5.2%. EBITDA totaled $70.9, reflecting an increase of 12% year over year.
Balance Sheet & Cash Flow
At the end of 2019, cash and cash equivalents were $168.3 million, significantly up from $27.3 million at 2018-end.
In 2019, net cash from operating activities totaled $349.3 million against net cash used in operating activities of $1167 million a year ago.
2019 Highlights
UFP Industries reported adjusted earnings of $2.91 per share, surpassing the consensus estimate of $2.89 and increasing 20.7% from the year-ago figure of $2.41. However, net sales of $4.42 billion declined almost 2% due to 8% lower lumber prices.
New product sales were $540 million in the year, up 13% from 2018. For 2020, it has removed $126 million of 2019 sales from its new products classification, despite continuing to sell those products.
Louisiana-Pacific Corporation (LPX - Free Report) reported unimpressive results in fourth-quarter 2019. Lower Oriented Strand Board (“OSB”) prices and reduced commodity OSB shipments across all North America segments (down 29%) negatively impacted its performance. However, these headwinds were partially offset by SmartSide Strand revenue growth of 11%.
Weyerhaeuser Company (WY - Free Report) reported mixed fourth-quarter 2019 results, with earnings missing the Zacks Consensus Estimate by 57.1%, while net sales beating the same by 1.6%. However, the top and bottom lines declined 5.4% and 70%, respectively, year over year. Its two major segments reported significantly lower net sales on a year-over-year basis.
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UFP Industries (UFPI) Q4 Earnings Top Estimates, Margins Up
UFP Industries, Inc. (UFPI - Free Report) reported strong earnings in fourth-quarter 2019 on the back of increased unit sales, its ability to leverage fixed costs, and improved sales of higher-margin, value-added products that comprise a greater portion of its product mix. The company’s bottom line not only surpassed the Zacks Consensus Estimate but also increased year over year. Notably, this was the best fourth-quarter performance in the company’s history.
The stock inched up 0.4% in the after-hour trading session on Feb 19.
On Feb 3, 2020, it announced changes in the frequency of dividend payments from semi-annual to quarterly. Also, it raised quarterly cash dividend by 25% to 12.5 cents a share, payable on Mar 15, 2020 to its shareholders of record on Mar 1, 2020.
Earnings & Net sales Discussion
The company’s earnings of 61 cents per share topped the consensus estimate of 59 cents by 3.4%. Also, the reported figure increased 19.6% from 54 cents reported in the year-ago period.
UFP Industries, Inc. Price, Consensus and EPS Surprise
UFP Industries, Inc. price-consensus-eps-surprise-chart | UFP Industries, Inc. Quote
Net sales of $998 million marginally missed the consensus mark of $998.8 million but grew 1% on a year-over-year basis from $988.2 million. Lower lumber prices reduced gross sales by 5%.
End-Market Sales Discussion
UFP Industries classifies top-line results on the basis of end-markets served. Investors should note that UFP Industries’ end-market sales sum up to total gross sales. Gross sales during the reported quarter came in at $1,012 million, up 1% from the year-ago period.
UFP Retail: The segment’s sales increased 7% year over year to $323.3 million during the quarter. Retail unit sales were up 10% on the back of new product growth and market share gains. However, lower selling prices partially offset the same by 3%.
UFP Industrial: The Industrial segment’s sales totaled $309.7 million, reflecting a decline of 4% from the year-ago period. During the quarter, unit sales increased 2%, offset by 6% lower lumber pricing. The unit sales growth was attributed to acquisitions.
UFP Construction: Sales in the segment were $379 million, up 1% year over year. A 5% improvement in unit sales was partially offset by 4% decrease in selling prices. Unit sales in commercial, manufactured housing and residential customers grew 9%, 4%, and 3%, respectively, during the quarter.
Operating Highlights
Cost of goods sold, as a percentage of net sales, contracted 190 basis points (bps) from the year-ago quarter to 84.2%. Gross margin of 15.8% improved 190 bps year over year.
Selling, general and administrative expenses, accounting for 10.5% of net sales, increased 120 bps year over year. Operating margin in the quarter improved 60 bps to 5.2%. EBITDA totaled $70.9, reflecting an increase of 12% year over year.
Balance Sheet & Cash Flow
At the end of 2019, cash and cash equivalents were $168.3 million, significantly up from $27.3 million at 2018-end.
In 2019, net cash from operating activities totaled $349.3 million against net cash used in operating activities of $1167 million a year ago.
2019 Highlights
UFP Industries reported adjusted earnings of $2.91 per share, surpassing the consensus estimate of $2.89 and increasing 20.7% from the year-ago figure of $2.41. However, net sales of $4.42 billion declined almost 2% due to 8% lower lumber prices.
New product sales were $540 million in the year, up 13% from 2018. For 2020, it has removed $126 million of 2019 sales from its new products classification, despite continuing to sell those products.
Zacks Rank & Peer Releases
UFP Industries, which shares space with Company, Inc. (TREX - Free Report) in the Zacks Building Products - Wood industry, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Louisiana-Pacific Corporation (LPX - Free Report) reported unimpressive results in fourth-quarter 2019. Lower Oriented Strand Board (“OSB”) prices and reduced commodity OSB shipments across all North America segments (down 29%) negatively impacted its performance. However, these headwinds were partially offset by SmartSide Strand revenue growth of 11%.
Weyerhaeuser Company (WY - Free Report) reported mixed fourth-quarter 2019 results, with earnings missing the Zacks Consensus Estimate by 57.1%, while net sales beating the same by 1.6%. However, the top and bottom lines declined 5.4% and 70%, respectively, year over year. Its two major segments reported significantly lower net sales on a year-over-year basis.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>