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Gibraltar Lags Earnings Est. in 1Q13

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Building and construction materials producer, Gibraltar Industries Inc. (ROCK - Free Report) posted adjusted earnings per share of 4 cents for the first quarter of 2013, down 55.6% compared with 9 cents in the year-ago quarter. It also missed the Zacks Consensus Estimate of 12 cents by 66.7%. The decrease in earnings is attributed to worse than expected seasonal variations, increased difficulties on the prices, as well as customer’s inventory control.

Revenue: In the first quarter of 2013, net sales were $196.8 million, up 2.4% year over year, primarily due to the acquisitions undertaken by Gibraltar. However, revenue missed the Zacks Consensus Estimate of $199.0 million by 1.1%.

Margins: Gross profit margin in the quarter dropped 91 basis points to 18.5%. SG&A expenses for the quarter were recorded at $30.7 million, compared with $28.4 million in the year-ago comparable quarter.

Gibraltar’s operating margins of 2.9% in the reported quarter decreased from 4.7% in the year-ago comparable quarter due to decreased gross profit as well as a hike in operating expenses.

Balance Sheet/Cash Flow: Exiting the first quarter 2013, Gibraltar’s cash and cash equivalents were approximately $30.3 million, compared with $48.0 million in the previous quarter. Total long-term debt balance stood at $214.0 million against $206.7 million in the preceding quarter.

Gibraltar’s cash used in operations amounted to $12.7 million for the first quarter 2013 compared with $13.1 million used in the year-ago comparable quarter. Capital expenditure incurred by the company in the reported quarter was $2.0 million, against $2.7 million spent in the first quarter of 2012.

Outlook: Despite a slower than expected start of the year 2013, Gibraltar expects its earnings and revenue to increase, compared with the previous year. It is also expected that the multi-family building market as well as infrastructure products market will flourish in 2013. Gibraltar expects a favorable contribution to earnings from the West Coast operations, considering its restructuring in the fourth quarter of 2012.

Gibraltarcurrently carries a Zacks Rank #1 (Strong Buy). Other stocks worth a look in the industry are Shiloh Industries Inc. (SHLO - Free Report) , with a Zacks Rank #1 (Strong Buy) while, L.B. Foster Co. and Mechel OAO carry a Zacks Rank #2 (Buy) each.

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