Eagle Materials Inc. (EXP) on Q3 2022 Results - Earnings Call Transcript
Operator: Good day, everyone and welcome to Eagle Materials, Third Quarter of fiscal 2022, Earnings Conference Call. This call is being recorded. At this time, I would like to turn the call over to Eagle's President and Chief Executive Officer Mr. Michael Haack. Mr. Haack please go ahead sir. Michael Haack: Thank you, Josh. Good morning. Welcome to Eagle Materials Conference Call for our Third Quarter for Fiscal 2022. This is Michael Haack. Joining me today are Craig Kesler, our Chief Financial Officer, and Bob Stewart, Executive Vice President of Strategy, Corporate Development, and Communications. We're glad you could be with us today. There will be a slide presentation made in connection with this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call. These statements are subject to risks and uncertainties that could result -- that could cause results to differ from those discussed during the call. For further information, please refer to this disclosure, which is also included at the end of our press release. Let me start off by saying this was another good quarter for Eagle. Our achievement of record earnings per share highlights the fact that people and prudent investments make a huge difference. First and foremost, I am proud of our Eagle team. At our plant, the Eagle team relentlessly work to deliver our quality products to our customers timely and consistently. I want to personally thank each and every one of our employees that made not only this quarter at success, but for the work performed during these previous two years against the COVID backdrop. Secondarily, this quarter has shown the benefits from a combination of many years of prudent investments. Investments that in some ways uniquely position us to take advantage of the opportunities that are presenting themselves to us today, and that we believe will continue to present themselves to us in the quarters ahead. Our performance in light of this, the notable headwinds such as Omicron disruption, supply chain disruption and inflation is a testament to the resilience of our business model, the soundness of our strategic choices, and to our proven operational capabilities. Let me elaborate on some of the reasons for this performance. Let me start with Omicrom. We are fortunate to have a longstanding safety culture. We will not do a job unless we could do it safely. This foundation has served us well as we have managed the waves of the pandemic. Those that follow us know that we enjoy an exceptional health and safety track record. And I am proud to say that we achieved the best safety performance in Company history these last 9 months. This underscores our deep commitment to our people and their well being. Our health, safety, and environmental processes, which we view as actually quite closely related, are robust and our well established safety first operating philosophies have been applied to meet the challenges of the pandemic. Now let me turn to the other two headline concerns to supply chain and inflation. It is worth noting that we have several significant advantages here. We own, or control, our primary raw material inputs and our reserves are decades deep. Arguably, these resources have already been paid for, and are not subject to supply chain disruption or inflation in the way that many other construction materials are, nor do we rely on key inputs that come from overseas. Moreover, our operations are not particularly labor intensive as we have invested in process controls and reliable methods of production to relieve manual labor and improve safety. These advantages have served us well this quarter, and this was reflected in our operating results. Now let me turn to why we believe we have not achieved peak earnings, margins, or returns for our businesses this cycle. First, let me talk about the light side of our business. The underlying demand for our products is strengthening. Our volumes in gypsum wallboard could have been even stronger this quarter if homes that were started could have been completed. Supply chain issues for other products slowed the completion of these homes and admittedly, slowed some of our product distribution. This portends well for the quarters ahead as this backlog is worked through. There's a lot of evidence that the next 12 months at a minimum will be especially strong for demand on the residential front. Although home affordability is a growing concern, we are still a long way from impeding demand in our markets. We focus in the South and the Sunbelt, and have no operations in the North East or West Coast where the market affordability is most challenged. Our key southern tier markets are in fact seeing unprecedented migration from affordability challenged areas. The outlook for repair and remodel is also robust. The combination of new housing construction and repair and remodeling, accounts for the lion's share of wallboard demand. Although commercial and non-residential is a relatively small application area, it is also strengthening in our southern tier markets. Strong wallboard demand provides pricing opportunities. Wallboard prices for us were up 29% year-on-year. We do not believe the positive pricing trajectory is over and this is evidenced with our January price increase. In addition, we have the capability to flex existing production to meet short to mid-term demand swings. Now let me turn to the heavy side of our business where we are well-positioned heartland U.S. producer of cement. Here all of our plants are virtually sold out and so we expect pricing will be our greatest profit lever for cement in the most immediate quarters ahead. Infrastructure spend is on an upswing, aided by federal initiatives and state and local budgets in our markets are generally strong. Infrastructure and residential construction together are the most important end-use demand segments for cement and will be important multi-year drivers. On the last call, I spotlighted our attentions with respect to one of our five strategic thrust highlighted in our environmental and social disclosure report on our website. This product is one that will help us manage our carbon footprint in cement and it's called limestone cement or PLC. Let me bring you up to date on the latest developments here. This is a very important initiative at Eagle due to the benefits of reducing our overall carbon footprint per ton of cement produced and then making our scarce clinker go further, in effect, unlocking incremental cement production capacity. Some aspects of achieving our objectives here are fully under our control and some are not. Those that are operational considerations, those that are not include gaining beauty approvals for product use in key applications. Every one of our cement plants have now completed production trials in product performance testing. As a result of these trials, all of our cement plants have evaluated capital investment requirements to reach what we have calculated to be the target limestone substitution levels. These capital investments are a varying degree of complexity, and will be completed over the coming months, or years, depending on the location. Regarding our customer acceptance, we have field trials underway with our customer base and are working with DOTs in all of our relevant market areas. So far in FY2022, we have produced and sold over 100,000 tons of this eco -friendly product out of four of our facilities. We expect increased sales in this -- of this product in FY2023. We are making progress on testing and the introduction of this product at an unprecedented pace at Eagle. Progress on this and our other ESG initiatives is a personal priority of mine and is reported to our full board quarterly. I mentioned at the beginning of my remarks that we see good opportunity for expanded earnings, margins, and returns. I commented on the first two, now let me say a few words about returns. We are generating a lot of cash. Our priority for that cash is to grow the Company, recognizing we have strict financial and strategic criteria that we will always follow. During intervals wherein such growth investments are not feasible, we know what to do with the cash. Our actions this quarter speak to our convictions here fairly convincingly. We repurchased 1.2 million shares of our common stock for a total cash return to our shareholders of nearly $200 million during this quarter. Now let me turn it over to Craig for the financial results. Craig Kesler: Thank you, Michael. Third quarter revenue was a record $463 million, an increase of 14% from the prior year. The increase reflects higher sales prices across each business unit and higher cement sales volume. The strong fundamentals in both cement and wallboard contributed to record EPS during the quarter. Diluted earnings per share from continuing operations was $2.53, a 30% increase from the prior year. This increase also reflects the reduced share count resulting from our share repurchases. Turning now to segment performance. This next slide shows the results in our Heavy Materials sector, which includes our cement and concrete and aggregate segments. Revenue in the sector increased 9%, driven by the increase in cement sales prices and sales volume. Submitted prices increased 6% while sales volume was up 7%. Our aggregate sales volume however, was down 42% in the quarter as several large jobs were delayed. Operating earnings increased 11%, reflecting higher cement prices and sales volumes, partially offset by higher energy and maintenance costs. Moving to the light materials sector on the next page, revenue in our light material sector increased 21%, reflecting higher wallboard and paperboard sales prices, as well as increased paperboard sales volume. Operating earnings in the sector increased 32% to $63 million, reflecting higher net sales prices, which helped to offset higher input costs namely recycled fiber and energy. Looking now at our cash flow, which remained strong, during the quarter operating cash flow was $167 million. The 9% year-on-year decrease reflects the timing of working capital shifts in the prior year, primarily associated with the receipt of our IRS refund. Capital spending increased to $28 million. And as Michael mentioned, we repurchased approximately 1.2 million shares of our common stock for a $188 million and paid our quarterly cash dividend. Combined, we returned nearly $200 million to shareholders. Year-to-date, we've repurchased approximately 2.9 million shares or 7% of our outstanding. Finally, a look at our capital structure. At December 31st, 2021, our net debt-to-cap ratio was 41% and our net debt to EBITDA leverage ratio was 1.3 times. The refinancing we completed last quarter resulted in this favorable capital structure with significant liquidity to continue pursuing our strategic priorities. Thank you for attending today's call. Josh will now move to the question and answer session. Operator: Thank you. Our first question comes from Trey Grooms with Stephens. You may proceed with your question. Trey Grooms: Hey. Good morning, Craig and Michael. Good work in the quarter. And thanks for taking my questions. Craig Kesler: Thanks, Trey. Trey Grooms: The Wallboard shipments in the quarter were down a little bit, which you spoke to on the last earnings call with some of the delays the home -- homebuilders were facing. But you mentioned that your order pace improved during the quarter. And understanding that underlying demand is there, are you seeing some easing in the log jam there? And how should we be thinking about Wallboard volume in the near-term to medium-term? Craig Kesler: Yeah. Thanks, Trey. To your point during the quarter, some of those effects of supply chains at the home builder level were still lingering, but orders were very strong and have continued to be strong. And we think 2022 is set up for another strong year. You've got low inventory level of homes. Job creation continues to be very strong wage improvement. And so we expect to see a good calendar 2022 on the residential side, which is the primary driver for wallboard. Repair and remodel continues to be very strong as well. And we are starting to see some improvement in the private non-residential construction sector as well. So all of that should add up for a pretty strong 2022. Trey Grooms: Okay. Thanks for that. And I guess maybe shifting gears a little bit to pricing. You have price increases out in the market for January on both the heavy and light side of the business. And Michael, you touched on it briefly in your prepared remarks. But to the extent you can, could you talk about what you're seeing there on the pricing front with these increases that you have out in the markets? Michael Haack: Yeah. Trey, I appreciate the question. Normally, we really got to wait to see. This is early in the cycle for us announcing these price increases. So we'll be able to give you more information after the next quarter. But the supply-demand dynamics look favorable for. Trey Grooms: Fair enough. Last one for me, and this is just on the comment made on what was going on within some of the -- on the Cement side with some of the large project delays. Could you -- could you go into a little more detail there as when you expect those to maybe come back into the picture, and the outlook for that -- those big -- those big projects that you've mentioned? Michael Haack: Yeah. Those were mostly on our aggregate side of the business, and it's really with some DOT projects and some other projects in the Austin area. We've grown our inventory to satisfy those projects and it's just a matter of those going. We expect those to get back on track here in this next quarter and see some movement of that product that we have in our inventory right now. Trey Grooms: Perfect. All right. Thanks for the color. I'll pass it on. Good luck. Operator: Thank you. Our next question comes from Brent Thielman with D.A. Davidson and Company. You may proceed with your question. Brent Thielman: Great. Thank you. Great quarter as well. I guess first question you talked about the constraints and those that are still experiencing it. It doesn't seem like that's as much the case in the cement business and all the markets that business serves. Could you talk about what you're seeing and hearing, maybe among project owners and contractors, I guess, particularly that rely on cement are they -- I think of sectors beyond residential, but are they still mitigating these constraints I guess fairly better? Michael Haack: When you look at the two businesses, they do have different -- some different end-use markets with it. But overall demand has been very strong for our products with it. On the cement side, we have been and continue to be virtually sold out at our locations. The other thing that you'll see is this winter was a very like winter with it -- which led us to really not as great of a demand reduction on that side. The one thing that is worth mentioning on that side is that also does pull down inventory that we normally build during this time frame. So the demand is there. We don't see any reason why it won't be favorable on both those businesses with what we're hearing from our customers. Brent Thielman: Yeah, Michael. To that point, I mean, how we own cement volume really strong. I appreciate the color there. I guess this is six quarter of town for comparisons on the JV side, maybe any color on what you're seeing there, light at the end of the tunnel where we might start to see some volume improvement there. Craig Kesler: Yeah. Brent, look, as we've said in Texas, very strong market and our operating facility has been sold out now for years. The volume changes there are more about purchase products and the timing of ships coming in and activities like that, so which are a little bit out of our control. But at an operating level, we continue to remain sold out. Brent Thielman: Okay. Maybe Craig this might be for you, but on cement do you have the unit cost, I guess headwind or maybe just absolute dollar impact from the higher energy costs that flowed through this quarter? Just some sense there. Craig Kesler: Yeah. It was generally a couple of million dollars. And if you think about cement production, it's an energy oriented business, fuel and electricity. And we are seeing some inflation there. We were able to more than keep pace with that on the pricing front. But that is something that we are closely watching. But it was a little bit of a headwind this quarter. Brent Thielman: All right. Just lastly, on that Paperboard side, it looks like you're starting to recapture those higher costs. I think previously you thought you might return to something closer to normal levels of profitability maybe by fiscal year-end. Do you -- do you think that might push a little more into the second half of the calendar year just as you're seeing costs bloom there? Craig Kesler: Yeah. When you look at how our Paperboard is structured, those costs get passed on a quarter of bagging, and it really depends on OCC pricing and where OCC price is. OCC price was flat this last quarter, pretty much a little bit down. Those costs will continue to be passed on in the subsequent quarters as OCC price changes. Brent Thielman: Okay. Very good. Appreciate it. Thank you. Operator: Thank you. Our next question comes from Adrian Huerta with JP Morgan. You may proceed with your question. Adrian Huerta: Thank you and good morning. Hi, Mike and Greg. Thank you for taking my question. Two questions. Number 1 is, can you just remind me if you implemented a second price increase last year for cement? And what are the chances to do a second price increase this year? And my second question has to do with the PLC cement comments that you were making. Can you just give us a rough sense on the potential investment that you will have to make on this, and these investments will basically expand your capacity by what percentage, or how many more cement capacity you're planning on adding by doing these investments? Thanks. Michael Haack: Sure. I'll address both those for you. With regards to pricing, really pricing in our businesses is really a demand-driven factor with it. We are continuing to monitor both our costs and our customer base with that, and we will continue to monitor that for potential second price increase. We have not made that decision at this point, but we will continue to monitor the supply demand dynamics with that over these next coming months. As per PLC side, PLC is going to be something that we will implement, as I said in the comments, over the coming months to coming years, depending on the capital. You picked up on the capital comment. If you looked at across all of our cement facilities and was figuring our normal capital burn and added another $25 to $30 million for the next two years, that would get us to where we need to be to produce that for all of our cement assets that we have. With regards to that, PLC is up to a 15% limestone addition. Each plant will have its different characteristics of how much it can put in to still meet the ASTM specifications of that product. We're looking at 8% to 12%, depending on the plant eventual addition. Now what also needs to be kept in mind is that's not across the board all cement because we also produce some other cements for oil well, which is a minor section of it and some type 3 cements and other cements with it. So it will be for our main core product that we produce. Adrian Huerta: Thanks and thank you, Mike. Appreciate it. So just to clarify. Last year, you did not implement a second price increase in any of your markets from cement. Craig Kesler: The only market we did have a second price increase in was in Texas. That was a full price increase. This year, we increased the timing or sped up the timing of this annual increase to January. Adrian Huerta: Excellent. Thank you, Greg and Mike, I appreciate it. Craig Kesler: Thanks. Operator: Thank you. Our next question comes from Anthony Pettinari with Citi. You may proceed with your question. Anthony Pettinari: Hi. Good morning. Just following up on the last question on cement balls. I think you saw volume up maybe 1% year-to-date, or fiscal year-to-date. Maybe putting aside any investments in PLC, what level of volume growth do you think you can reasonably drive maybe looking out to '23? Should we think about flat volumes, or do you think you can get to that long-term low single-digit target through de -bottle making? Michael Haack: Yes, so we look at our plans for capital investments all the time, and we have put in some capital investments to some additional storage facilities and some mill. But we are getting close to the end of where we could get there. Our teams have always been creative and we've always been able to eke out that extra percent or two, but again, I do want to remind the group that this fact, wherever anybody on the call is located, this was a very mild winter. So normally, we build inventory coming into the November, December, January, February timeframe to kick off the construction season. And November and December was very busy. So our inventory side is at one of the lowest points we've seen for clinker and for cement products. Anthony Pettinari: Okay. That's helpful. And then just clarifying. The PLC investment, I think you referenced the 8% to 12% capacity increase. That would be a cement capacity increase, not a clinker capacity increase. Or is there an impact to clinker, or how should we think about that? Michael Haack: No, that's exactly right. It's a cement capacity increases. The product is in our ground with the clinker. Anthony Pettinari: Okay. And maybe just switching gears, last one for me. You obviously have a lot of balance sheet flexibility. When you look at potentially M&A or the pipeline, are there any general comments you can make about availability of assets, maybe valuation of assets on either the heavier or the light side? Michael Haack: Yeah. We look at anything that's available out there, but we have very strate -- strict financial and strategic criteria to make an investment. And just because we have a lot of cash, does not mean we will stray from those criteria we have. And so the deal -- the deals out there right now, from some of the deals that closed in the last bid, looked a little expensive to us, but also there's not much out there right now. But we look at everything that's coming available right now. Anthony Pettinari: Okay. That's helpful. I'll turn it over. Operator: Thank you. Our next question comes from Jerry Revich with Goldman Sachs. You may proceed with your question. Jerry Revich: Yes. Good morning, everyone. Michael, I'm wondering if we could just dig in on a comment you made in your prepared remarks about opportunities take margins higher, particularly in wallboard. So given the moves in transportation costs in gypsum -- synthetic gypsum cost, how do you think about where your margins could get to in the cycle? I guess when we look at the impact on the cost structure for folks that aren't co-located, it could add 5% plus to the overall cost structure. So do you see your business getting to potentially the mid-40s margin range for wallboard with that cost structure change for the industry? Michael Haack: How I look at that comment that I made there, is really on, unlike the cement side of our business, we still have capacity on the wallboard side of the business. We operate our plants very efficiently. We own our own raw materials. So some of the inflationary aspects are not necessarily seen from us. As I said in the comments, when you have multi-decade reserves at some locations that are already paid for and paid for years ago, it helps us on that side. So really when I'm looking at that, it's on a volumetric side and on some of the cost headwinds that some others are seeing, we may not be seeing with regards to reserves. Jerry Revich: Michael, maybe to expand on that, what level of operating profit drop-through do you anticipate as you ramp up volumes? The incremental margins have been obviously super attractive in Wallboard over the past year. Do you think you could deliver 50%, 60% type drop-through on incremental sales from here based on that comment and having paid for the historical reserves? Michael Haack: Yeah. I'm not going to answer a certain percentage on that side. It's all going to depend on our distribution channels and what the supply-demand dynamics look like in the future. We just don't think we're at the peak yet with supply-demand dynamics. Jerry Revich: Okay. And then on your price increase letter, it looks like you're not protecting orders past the January 3rd ship date. Is that correct? So the price increase so you folks are implementing wallboard through immediately in the March quarter? Craig Kesler: That's right. Jerry Revich: Okay. And lastly, Craig, could you talk about the cement price increases. As you look around the footprint, any differences in terms of the effective price increase date and the price increase amount across your plants because in the past we've had some increases staggered into March and April and it sounds like the increase are happening earlier in cement this year. But can I get you to expand on that if you don't mind. Craig Kesler: They're largely all scheduled for early January. With one exception here in Texas, it was an April increase because of the fall increase that is -- that was just recently implemented. But across the wholly-owned foot -- network, it was all early January. As we said last quarter, they were all double-digits increases. And as Michael has said a couple of times now and with a really mild winter, start to the winter, at least, we've entered this -- we will enter this construction season with very low inventory levels. Jerry Revich: Terrific. Thanks. Operator: Thank you. Our next question comes from Stanley Elliott with Stifel. You may proceed with your question. Thank you. Our next question comes from Philip Ng with Jefferies. You may proceed with your question. Philip Ng: Hey, guys. The PLC initiative is to free up more clinker capacity. That sounds like a home run, but curious how prevalent is this across the industry. And can your peers take a similar initiatives to free up some capacity as well? Michael Haack: Yes. Great question with it. This is a product that can be produced by our competitors also. It is a limestone addition to cement. Each plant in our network -- we feel we're aggressively approaching this. We've done our homework, our research, and looked at when we could have our capital in place and start realizing the benefit of this. I can't comment on our competitors, where they stand in that cycle of how much investment it will take, how much time it will take for them to be operational on those aspects. Philip Ng: Got it. Okay. And then for me on your wallboard business, good to hear that your orders picked up, but any color, if your volumes inflected late in the December quarter and you expect that to inflect positively in the March quarter? Craig Kesler: I will just say, Phil, more broadly rather than going quarter-to-quarter, we just expect to see a good 2022 given the backdrop in the fundamentals that are supporting construction activity in the U.S. Philip Ng: Got it. Craig Kesler: I think it's a little too early to say we've cleared the log jam of supply chain. Things incrementally improve a little bit, but we're not done with it yet. Philip Ng: Okay. And Michael, you made a point that we're nowhere near a peak on your Wallboard business from a profitability standpoint. Pricing was certainly very robust this past year. How should we think about the cadence in 2022 assuming the demand backdrop is as upbeat as you're thinking about? Are we going back to one a year or it's going to really be dictated by demand? Michael Haack: It will be totally dictated by demand. As we -- we continue to evaluate that just as we do on the Cement side and you saw that in our cadence last year, and we'll make those decisions as we go through this year on our supply-demand fundamentals of our business. Philip Ng: Okay. Appreciate it. Thanks a lot, guys. Operator: Thank you. Our next question comes from Josh Wilson with Raymond James. You may proceed with your question. Josh Wilson: Good morning. Thanks for taking my questions. Craig Kesler: Thanks Josh. Josh Wilson: Craig, could you spell out for us what you think capex will be both in physical 2022 and 2023 given the various initiative? Craig Kesler: Yeah. We would have traditionally say our annual capital spending, and this is for all of Eagle is in the $80 million to a $100 million level. We'll be a little below that here in fiscal 2022, but if you use that as a kind of a normal run rates for 2023 and 2024, but that's the sustaining capital with some incremental projects. That as Michael mentioned as we're ramping up PLC across the network, there is some investment in there. And that could add $25 to $30 million on top of that core numbers. So it's going to be in that range for '23 and '24, as we sit here today. Michael Haack: And then as we look at the Paperboard margin, can you just peel the onion a little more about which were the biggest headwinds in this quarter and how quickly they might change or improve? Craig Kesler: By the look of it, the OCC prices by far away are the biggest headwind there. We had the large spike in those costs in the late summer / early fall and, as Michael alluded to earlier, it takes some time for that to actually work itself through the pricing mechanism. The good news is that seems to have plateaued here in the last couple of months. We actually saw a drop in January, so it does look like that headwind is reversed. But that certainly was the biggest driver of this quarter. Josh Wilson: Thanks. I'll turn it over. Operator: Thank you. Our next question comes from with Truist Security. You may proceed with your question. Unidentified Analyst: Hi. Good morning. This is stepping in for Keith Hughes. Congrats on a solid quarter, and thanks for taking my questions. Can you just add some color on just the acceleration in aggregates pricing, just whether you're seeing anything from any particular geography, any particular factors driving that? And then can you give us a sense of just where W allboard capacity utilization is for the Company? And maybe you can comment on where it might be for the industry? Thank you. Craig Kesler: Yes. Thanks, Dennis. On your first question, the change in pricing this quarter in aggregates had more to do with the discussion we had earlier about some of these jobs getting delayed. That was primarily around based material which is on average generally lower priced. So you're going to just buy product mix skew a little bit higher. So nothing more than more product mix than anything in for us in that business. In terms of wallboard utilization levels, as Michael said earlier, we do have some incremental capacity. As demand calls for it, we'll continue to ramp that up. But at effective levels, utilization rates are pretty high right now for us. I hesitate and won't talk about where the industry might be as we certainly don't know where those positions are, but for us we've got some opportunity as demand grows. Unidentified Analyst: Thank you. And can you just remind us on what organic price was for the quarter? Craig Kesler: Yeah. It was up to 6% year-over-year. Unidentified Analyst: Okay. Thank you. Operator: Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Michael Haack for any further remarks. Michael Haack: Thanks, Josh. We appreciate everybody calling in today and we'll look forward to talking to you here in the next quarter. Thank you. Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Eagle Materials Inc. (NYSE: EXP) Fiscal Year 2025 Earnings Report Highlights
- Eagle Materials Inc. (NYSE:EXP) reported a record revenue of $2.3 billion for the fiscal year 2025 but fell short of earnings expectations with an EPS of $2.08.
- The company's quarterly revenue was $470.18 million, missing the Zacks Consensus Estimate, and indicating a pattern of underperformance in surpassing consensus EPS estimates over the past four quarters.
- EXP's financial metrics reveal a P/E ratio of approximately 16.16, a moderate debt-to-equity ratio of 0.70, and a slight decrease in net earnings to $463.4 million for the year.
Eagle Materials Inc. (NYSE:EXP) operates in the building products sector, focusing on concrete and aggregates. The company recently reported its earnings for the fiscal year 2025 and the fourth quarter ending March 31, 2025. Despite achieving a record revenue of $2.3 billion for the full fiscal year, the company faced challenges in meeting earnings expectations.
On May 20, 2025, EXP reported earnings per share (EPS) of $2.08, which fell short of the Zacks Consensus Estimate of $2.34. This represents an 11.11% negative surprise. The EPS also decreased from $2.24 in the same quarter last year. Over the past four quarters, EXP has only surpassed consensus EPS estimates once, indicating a pattern of underperformance.
The company's revenue for the quarter was $470.18 million, missing the Zacks Consensus Estimate of $622.11 million by 1.59%. This is a slight decline from the $476.71 million reported a year ago. Despite the quarterly shortfall, EXP achieved a record revenue of $2.3 billion for the full fiscal year, marking a slight increase from the previous year.
EXP's financial metrics provide insight into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 16.16, indicating how the market values its earnings. The price-to-sales ratio is about 3.38, reflecting its market value relative to revenue. The enterprise value to sales ratio is around 3.82, showing the total valuation compared to sales.
The company's financial health is further highlighted by its debt-to-equity ratio of approximately 0.70, indicating a moderate level of debt. The current ratio of about 2.76 suggests that EXP can cover its short-term liabilities with its short-term assets. Despite these financial metrics, the company reported a 3% decrease in net earnings for the year, totaling $463.4 million.
Eagle Materials Inc. (NYSE:EXP) Quarterly Earnings Preview
Eagle Materials Inc. (NYSE:EXP) is a leading name in the construction materials industry, focusing on the production of gypsum wallboard and cement. As the company prepares to unveil its quarterly earnings on May 20, 2025, investors are eagerly awaiting the reported figures. Wall Street's anticipation includes an earnings per share (EPS) of $2.34 and a revenue forecast of approximately $479 million.
- The expected EPS of $2.34 for the quarter ending March 2025 signifies a 4.5% increase from the previous year.
- Revenue is projected to hit $479 million, a modest 0.2% growth year-over-year.
- The company's financial health is highlighted by a price-to-earnings (P/E) ratio of approximately 17.00, a debt-to-equity ratio of roughly 0.70, and a current ratio of about 2.76. The anticipated EPS of $2.34 for the quarter ending March 2025 marks a 4.5% rise from the prior year, as underscored by the company's performance.
Revenue is expected to reach $479 million, indicating a slight 0.2% increase compared to the same quarter last year. These figures suggest a consistent growth path for Eagle Materials, despite a downward revision of the consensus EPS estimate by 3.3% over the past month. Such adjustments in earnings forecasts are pivotal as they often foretell potential investor actions and have a significant correlation with the short-term price movement of a stock.
The market is closely monitoring whether Eagle Materials can exceed these forecasts, as this could positively impact the stock's price. On the other hand, failing to meet these estimates might lead to a decrease in stock value. Eagle Materials' financial indicators provide deeper insight into its market standing. With a P/E ratio of approximately 17.00, investors are willing to pay $17 for every dollar of earnings. The company's price-to-sales ratio is about 3.55, reflecting the value attributed to its sales. Moreover, the enterprise value to sales ratio is around 4.00, indicating how the market values the company's total worth in relation to its sales.
The company's financial stability is further highlighted by its debt-to-equity ratio of approximately 0.70, showing moderate financial leverage. A current ratio of about 2.76 suggests that Eagle Materials is well-equipped to meet its short-term liabilities with its short-term assets. As the earnings release date approaches, the company's performance and future earnings outlook will largely hinge on management's discussion of business conditions during the earnings call.
Eagle Materials Inc. Faces a Challenging Quarter.
- Eagle Materials Inc. reported a decrease in earnings per share (EPS) to $2.24, missing analyst expectations.
- Revenue for the quarter was approximately $476.7 million, showing a modest year-over-year growth of 1.4%.
- The company announced record fiscal year 2024 revenue of $2.3 billion and a 9% rise in diluted EPS to $13.61.
Eagle Materials Inc. (NYSE:EXP), a key player in the building products, concrete, and aggregates industry, recently disclosed its financial outcomes for the quarter ending March 2024. The company, known for its significant contributions to construction and building materials, faced a challenging quarter, as evidenced by its earnings per share (EPS) and revenue figures. These results are particularly noteworthy as they provide insights into the company's performance against Wall Street's expectations and its financial health over the past year.
For the fiscal fourth quarter, EXP reported earnings per share of $2.24, which did not meet the anticipated $2.72 set by analysts. This represents a notable decrease from the previous year's EPS of $2.79, marking a -17.65% surprise against expectations. Such a decline in EPS is a critical indicator of the company's profitability challenges during the quarter, despite having outperformed earnings forecasts in the preceding quarter with a positive surprise of 4.49%.
On the revenue front, Eagle Materials reported approximately $476.7 million, slightly missing the Zacks consensus estimate by 0.40%. This figure, however, represents a modest year-over-year growth of 1.4% from $470.13 million, showcasing the company's ability to increase its revenue despite the market's tough conditions. It's important to note that this is only the second time in the last four quarters that the company has not surpassed consensus revenue estimates, highlighting the variability in its financial performance.
For the fiscal year 2024, Eagle Materials announced a record revenue of $2.3 billion, a 5% increase from the previous year, and net earnings of $477.6 million, up by 3%. These figures, along with a 9% rise in diluted earnings per share to $13.61 and a 7% improvement in adjusted EBITDA to $834.5 million, underscore the company's strong performance over the year. The repurchase of 1.9 million shares, investing $343 million back into the company, further demonstrates Eagle Materials' commitment to enhancing shareholder value.
In terms of valuation metrics, EXP's price-to-earnings (P/E) ratio stands at approximately 17.28, indicating the market's valuation of its earnings. The price-to-sales (P/S) ratio of about 3.69, along with the enterprise value-to-sales (EV/Sales) ratio of roughly 4.17, reflects the company's market valuation in relation to its sales. Additionally, the enterprise value to operating cash flow (EV/OCF) ratio of approximately 16.74 and an earnings yield of about 5.79% offer insights into the company's profitability and valuation from an investor's perspective. The debt-to-equity (D/E) ratio of around 0.84 and a current ratio of approximately 2.62 suggest the company's financial leverage and liquidity status, respectively. These metrics are crucial for investors to understand Eagle Materials' financial health and market position.
Eagle Materials Inc. Quarterly Earnings Preview
- Eagle Materials Inc. is expected to announce its quarterly earnings with an EPS forecast of $2.72 and projected revenue of $484.69 million.
- The company has a history of surpassing consensus earnings estimates, boasting an average earnings surprise of 6.5% over the last four quarters.
- Valuation metrics such as the P/E ratio of 17.64 and P/S ratio of 3.92 provide insights into the company's market valuation.
Eagle Materials Inc. (NYSE:EXP), a leading producer of construction materials including gypsum wallboard and cement, is set to announce its quarterly earnings on Tuesday, May 21, 2024, before the market opens. This announcement is highly anticipated by investors and analysts alike, as it provides a snapshot of the company's financial health and operational performance. Wall Street's expectations are set with an earnings per share (EPS) forecast of $2.72 and projected revenue of approximately $484.69 million for the quarter.
The company's financial outlook, as highlighted by Zacks Investment Research, suggests a slight decline in EPS by 2.5% year-over-year, with an adjusted revenue expectation of about $478.6 million, indicating a modest increase of 1.8% from the previous year. These projections have remained stable over the past 30 days, signaling a consensus among analysts about the company's performance for the quarter ending March 2024. This stability in earnings and revenue estimates underscores the importance of monitoring changes in these forecasts, as they can significantly influence investor reactions and the stock's short-term price movements.
Eagle Materials has a history of surpassing consensus earnings estimates, with an average earnings surprise of 6.5% over the last four quarters. This track record of exceeding expectations has contributed to the company's reputation for reliability in its financial reporting. However, the slight downward revision of the EPS estimate to $2.72 from $2.77 over the past month reflects a cautious outlook from analysts, despite the company's past performance.
The anticipated financial results are believed to be driven by improved residential and infrastructural activities, which could have provided a boost to Eagle Materials' performance in the fiscal fourth quarter. Nonetheless, concerns about lower pricing for Wallboard and Paperboard remain, potentially impacting the company's financials. As the earnings release date approaches, investors and stakeholders will be closely watching for any deviations from these projections, as the company's ability to meet or exceed analyst expectations could significantly influence its stock price in the near term.
Eagle Materials' valuation metrics, such as the price-to-earnings (P/E) ratio of approximately 17.64 and the price-to-sales (P/S) ratio of about 3.92, offer insights into how much investors are willing to pay for each dollar of earnings and sales, respectively. These ratios, along with the enterprise value to sales (EV/Sales) ratio of roughly 4.37 and the enterprise value to operating cash flow (EV/OCF) ratio of approximately 17.51, highlight the company's valuation in relation to its sales and operating cash flow after adjusting for debt. With an earnings yield of about 5.67% and a debt-to-equity (D/E) ratio of around 0.78, Eagle Materials demonstrates its profitability from an investor's perspective and its financial leverage in terms of debt used to finance its assets. The current ratio of approximately 2.61 further indicates the company's ability to cover its short-term liabilities with its short-term assets.
Eagle Materials Reports Q4 Beat, Increases Repurchase Authorization
Eagle Materials (NYSE:EXP) reported its Q4 results, with EPS coming in at $1.90, beating the Street estimate of $1.77. Revenue was $413.1 million, compared to the Street estimate of $400.62 million. The company also increased its repurchase authorization to 10.3 million (25% of outstanding share count).
Despite broader concerns around energy cost inflation and a decelerating/declining housing backdrop, the company continued to deliver strong pricing gains and margin expansion across both its Heavy and Light Materials segments.
Moreover, the company has enacted mid-year price increases across the majority of its business lines to further offset any inflationary pressures (particularly in energy/freight), which should embed some margin resilience in the upcoming fiscal year.
Eagle Materials Reports Q4 Beat, Increases Repurchase Authorization
Eagle Materials (NYSE:EXP) reported its Q4 results, with EPS coming in at $1.90, beating the Street estimate of $1.77. Revenue was $413.1 million, compared to the Street estimate of $400.62 million. The company also increased its repurchase authorization to 10.3 million (25% of outstanding share count).
Despite broader concerns around energy cost inflation and a decelerating/declining housing backdrop, the company continued to deliver strong pricing gains and margin expansion across both its Heavy and Light Materials segments.
Moreover, the company has enacted mid-year price increases across the majority of its business lines to further offset any inflationary pressures (particularly in energy/freight), which should embed some margin resilience in the upcoming fiscal year.
Eagle Materials Reported Q3 EPS Beat, In-Line Revenues
Eagle Materials Inc. (NYSE:EXP) reported its Q3 results, with EPS coming in at $2.53 (3% above the Street estimate) and revenue and EBIT of $463 million and $137 million, respectively, both in line with the consensus estimates.
More importantly, management made a few comments during the earnings call, which analysts at Berenberg Bank find encouraging. First, the company is ramping production of Portland Limestone Cement (PLC), which not only reduces its carbon footprint, but should also add around 8-12% to cement capacity over the coming years (depending on the plant). Secondly, management appeared confident that there was further upside potential for the Wallboard operating margin despite investor concerns that the company may have reached a peak at around 37-38%.
