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Cornerstone Building (CNR) Posts Wider-Than-Expected Q1 Loss
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Cornerstone Building Brands, Inc. reported lackluster results in first-quarter 2020, wherein loss was wider than expected.
Shares of the company fell 3.1% in the after-hour trading session on May 12, post the earnings release.
Earnings & Revenue Discussion
The company reported adjusted loss of $1.20 per share, wider than the Zacks Consensus Estimate of a loss of 22 cents. The metric was also wider than the year-ago figure of 29 cents per share.
Cornerstone Building Brands, Inc. Price, Consensus and EPS Surprise
Net sales of $1,113.8 million were up 4.6% year over year. On a pro-forma basis, net sales improved 3.1% from a year ago driven by positive price/mix and higher volume.
Segmental Performance
The Windows segment reported revenues of $448.5 million, up 6.4% year over year. Gross margin also improved 170 basis points (bps) in the quarter.
The Siding segment revenues were $241 million, up 10.4% from the prior-year quarter. Gross margin also improved 930 bps. After adjusting acquisition impacts, net sales increased 3% and gross margin expanded 230 bps.
Revenues in the Commercial segment slipped 0.2% from the year-ago figure to $424.3 million. The segment’s gross margin improved 180 bps year over year.
Operational Highlights
Gross margin during the quarter increased 320 bps to 20.7%. Selling, general and administrative expenses — as a percentage of net sales — grew 30 bps.
Adjusted EBITDA came in at $96.2 million, up from $71.7 million reported in the year-ago quarter. Pro-forma adjusted EBITDA rose 36% year over year to $98.1 million. Pro-forma adjusted EBITDA margin also improved 210 bps to 8.7%. The upside was mainly driven by favorable price/mix, net of inflation, partially offset by higher direct labor and other compensation and benefits costs.
Financial Update
As of Apr 4, 2020, the company had cash and cash equivalents of $475.7 million compared with $98.4 million at 2019-end. Additionally, it had excess availability of $118 million on the asset-based revolving credit facility. Notably, it has no near-term debt maturities and a covenant-lite structure. Cash used in operations was $2.2 million at first quarter-end compared with $48.7 million reported on Mar 30, 2019.
Guidance
Owing to uncertainty surrounding COVID-19, the company has suspended its segmental sales and earnings guidance.
Cornerstone anticipates second-quarter 2020 net sales to be in line with or better than the April data, wherein the metric declined 25% year over year.
Martin Marietta Materials, Inc. (MLM - Free Report) reported lower-than-expected earnings in first-quarter 2020. The downside was due to the impact of lower unit production costs on aggregates inventory standards and a change in tax election for a subsidiary.
Vulcan Materials Company (VMC - Free Report) reported impressive results in first-quarter 2020. Both the top and bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year on the back of solid segmental performance, despite wet weather in certain key markets in Southeast and Southwest.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Cornerstone Building (CNR) Posts Wider-Than-Expected Q1 Loss
Cornerstone Building Brands, Inc. reported lackluster results in first-quarter 2020, wherein loss was wider than expected.
Shares of the company fell 3.1% in the after-hour trading session on May 12, post the earnings release.
Earnings & Revenue Discussion
The company reported adjusted loss of $1.20 per share, wider than the Zacks Consensus Estimate of a loss of 22 cents. The metric was also wider than the year-ago figure of 29 cents per share.
Cornerstone Building Brands, Inc. Price, Consensus and EPS Surprise
Cornerstone Building Brands, Inc. price-consensus-eps-surprise-chart | Cornerstone Building Brands, Inc. Quote
Net sales of $1,113.8 million were up 4.6% year over year. On a pro-forma basis, net sales improved 3.1% from a year ago driven by positive price/mix and higher volume.
Segmental Performance
The Windows segment reported revenues of $448.5 million, up 6.4% year over year. Gross margin also improved 170 basis points (bps) in the quarter.
The Siding segment revenues were $241 million, up 10.4% from the prior-year quarter. Gross margin also improved 930 bps. After adjusting acquisition impacts, net sales increased 3% and gross margin expanded 230 bps.
Revenues in the Commercial segment slipped 0.2% from the year-ago figure to $424.3 million. The segment’s gross margin improved 180 bps year over year.
Operational Highlights
Gross margin during the quarter increased 320 bps to 20.7%. Selling, general and administrative expenses — as a percentage of net sales — grew 30 bps.
Adjusted EBITDA came in at $96.2 million, up from $71.7 million reported in the year-ago quarter. Pro-forma adjusted EBITDA rose 36% year over year to $98.1 million. Pro-forma adjusted EBITDA margin also improved 210 bps to 8.7%. The upside was mainly driven by favorable price/mix, net of inflation, partially offset by higher direct labor and other compensation and benefits costs.
Financial Update
As of Apr 4, 2020, the company had cash and cash equivalents of $475.7 million compared with $98.4 million at 2019-end. Additionally, it had excess availability of $118 million on the asset-based revolving credit facility. Notably, it has no near-term debt maturities and a covenant-lite structure. Cash used in operations was $2.2 million at first quarter-end compared with $48.7 million reported on Mar 30, 2019.
Guidance
Owing to uncertainty surrounding COVID-19, the company has suspended its segmental sales and earnings guidance.
Cornerstone anticipates second-quarter 2020 net sales to be in line with or better than the April data, wherein the metric declined 25% year over year.
Zacks Rank & Peer Releases
Cornerstone — which shares space with Forterra, Inc. in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Martin Marietta Materials, Inc. (MLM - Free Report) reported lower-than-expected earnings in first-quarter 2020. The downside was due to the impact of lower unit production costs on aggregates inventory standards and a change in tax election for a subsidiary.
Vulcan Materials Company (VMC - Free Report) reported impressive results in first-quarter 2020. Both the top and bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year on the back of solid segmental performance, despite wet weather in certain key markets in Southeast and Southwest.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>