Eagle Materials Inc. (EXP) on Q1 2023 Results - Earnings Call Transcript
Operator: Good day, everyone, and welcome to Eagle Materials Q1 2023 Earnings Conference Call. Please note, this even is being recorded. I would like to turn the conference call over to Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead, sir. Michael Haack: Thank you. Good morning. Welcome to Eagle Materials conference call for our first quarter for fiscal 2023. 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 are 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 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 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. First, I want to start off by saying we had a very good quarter. Business conditions remain favorable for Eagle. I am pleased to report we enjoyed record adjusted net earnings per share up 25% on record revenues. We're able to capitalize on very favorable market conditions for our product in our U.S.-operating geographies. We expanded gross margins by 30 basis points, bringing our gross margins to nearly 27% as we overcame inflationary cost headwinds to achieve this result. This illustrates once again that being a low-cost producer and a commodity industry has benefits in good times, not just in tough times. We realized 24% price increases in wallboard for the quarter, reflecting the strong prevailing market demand and we realize 10% higher cement -- prices for cement. We are implementing a second round of price increases in cement starting this month as we remain in the virtually sold out position. We have some headroom left and wallboard capacity and our wallboard volumes were up 5% for the quarter. The question on many investors' minds now is what is ahead of this construction cycle? Some aspects of the outlook I'm actually quite confident about and others I'm less confident about. First thing I'm confident about is that Fed moves will eventually slow the economy. The question is by how much and for how long? Much of our business strength is driven by infrastructure spend, which is less consumer dependent and more policy dependent. On the infrastructure side, the outlook is very good. We're seeing a willingness to invest in infrastructure for both the federal and the state level. This investment is not only for renewing existing infrastructure, but adding additional infrastructure. In fact, as it relates to both need recognition and funding clarity, there's arguably more visibility than there has ever been before in this aspect of the outlook. For the housing side, which represents the single most critical end use for our products, there's more uncertainty to the outlook. To answer -- the answer of -- to how the housing side will play out the cycle will depend heavily on the consumer. So far, consumer spending has been remarkably resilient, bolstered in part by stronger household balance sheets, and a sense of security about jobs and job prospects. My confidence about this year in the longer term is actually high because of our visibility on the drivers of demand for our products. The mid-term is where I have more questions. Short-term, the rate of the outlay for federally-aided highway funding and budget allocations for state funding have largely been set and they will accelerate over the next two years. The momentum associated with a record pace of housing construction will see us through this year from a standpoint of building materials demand. Single family units under construction is at the highest level since November of 2006 and multifamily units under construction is at the highest level since 1974. Record home construction backlogs will support it for, for product demand this year. Regarding the long-term, what gives me the most confidence about housing is demographics. The age 30 to 39 group is traditionally the most important home buying cohort as it corresponds to when families are most frequently becoming established and inclined to buy homes. This age group has been increasing and is expected to increase further through 2028. Mid-term is where it's the greatest uncertainty. Will the Fed overshoot, undershoot or land the plane just right? What the Fed does is not under our control. Therefore, we will do as we always have and that is focused on operating our assets safely, efficiently, and effectively. In short, we will focus on what is entirely in our control to add value to our shareholders. We are well-positioned and well-prepared for the mid-term eventualities. Our track record through the cycles is arguably unrivaled in our industry; margins, returns, EBA, safety, customer satisfaction, environmental stewardship, you name it. I'm confident we will meet any challenges that may be served up in the mid-term with the same steadfastness in both strategy and execution that has led to the results we are sharing with you today. We are well-positioned, well-prepared, and cycle experienced. We also continue to hold steadfast to our investment priorities and disciplines. Our first priority remains growth and improvement investments. We remain highly disciplined about our strategic focus and return criteria. We will not compromise either aspect and pursuit of growth for growth's sake. Having said that, we continue to find the acquisitions that do meet our criteria. At this time, these are smaller and are directed at extending our network of cement terminals, expanding our aggregate operations or improving our low cost producer positions. One such acquisition that we were able to close in the quarter was a concrete and aggregate producer north of Denver. This acquisition gives us multiple decades of aggregates in a market where we participate in today. Our free cash flows are strong and when we do not find growth investments that meet our criteria, we have a strong track record of returning cash to shareholders, especially through share repurchases. This quarter was no exception. I'm pleased to say we invested $110 million to repurchase 884,000 shares this quarter. Another critical priority for us is advancing our environmental and social agenda. It is a company priority and a personal one. We continue making progress on the rollout of our limestone cement initiative, which will make our finite clinker production go further and reduce the carbon footprint of concrete in use on a per yard basis. Specifically, I'm pleased to report that over half the sales at one of our largest cement plants this quarter was our new Portland limestone cement. This is a major milestone for us. across our system. nearly 15% of our cement sales for the quarter were limestone cement, a major accomplishment, but only a start. I might add that these sales were at price equivalence with our traditional product. In summary, in conclusion, I cannot help but feel optimistic about the prospects for the company and the economy when business is as good as it is today. We remain confident about the short-term and the long-term and recognize the mid-term introduces a more than usual mount of uncertainty as the Fed rebalances employment and inflation goals. I assure you that we are well-prepared and well-positioned to capture the opportunities that are presenting themselves today and to meet the challenges of any eventualities ahead. Now, let me turn it over to Craig to discuss the financials for the quarter. Craig Kesler: Thank you, Michael. As mentioned first quarter revenue was a record $561 million, an increase of 18% from the prior year. Excluding the recently acquired business revenue increased 16%. The increase reflects higher wallboard and cement sales prices as well as increased wallboard sales volume. First quarter earnings per share was $2.75, that's a 22% increase from the prior year. The increase is driven by improved earnings and our reduced share count due to our buyback program. Fully diluted shares are down 10% from the prior year. Excluding non-routine items highlighted in the earnings release, first quarter adjusted EPS was up 25%. Turning now to segment performance. This next slide shows the results in our heavy material sector, which includes our cement and concrete and aggregate segments. Revenue in the sector increased 10%, driven primarily by the increase in cement sales prices implemented earlier this year. These increases were partially offset by lower cement sales volume. And operating earnings were essentially flat as increased cement sales prices were partially offset by higher energy and maintenance costs during the quarter. Given the strong demand backdrop, we did implement a second round of cement and cement price increases in early July. Within the concrete and aggregates segment, on a like-for-like basis, our concrete sales volume improved 2% and our aggregate sales volume improved 31%. Moving to the light material sector on the next slide, revenue in our light material sector increased 30%, reflecting higher wallboard sales volume and prices. Operating earnings in the sector increased 32% to $88 million, reflecting higher net sales prices, partially offset by higher input costs for recycled fiber and energy. And while energy costs remain elevated, we recently increased our foreign purchases for natural gas to 40% of company-wide needs at $4.78 per MMBtu. Looking now at our cash flow, which remains strong. In the first quarter, operating cash flow increase 13% to $125 million reflecting improved earnings and working capital management. Capital spending increased to $15 million. As Michael mentioned, during the quarter, we completed the acquisition of an aggregates-led business in Northern Colorado with a purchase price of $121 million. We also repurchased 884,000 shares of our common stock for $110 million and paid our quarterly dividend. Between the share repurchases and dividends, we returned $119 million to shareholders this quarter. Finally, a look at our capital structure. At June 30th, our net debt to cap ratio was 49% and our net debt to EBITDA leverage ratio was 1.6 times. We ended the quarter was $68 million of cash on hand, bringing total committed liquidity at the end of the quarter to approximately $631 million and we have no meaningful near-term debt maturity, giving us substantial financial flexibility. Thank you for attending today's call. We'll now move to the question-and-answer session. Mike, I'll turn it back over to you. Operator: Yes, sir. Thank you. We will now begin the question-and-answer session. The first question we have will come from Trey Grooms of Stevens. Please go ahead. Trey Grooms: Hey, good morning, everyone. Nice work in the quarter and thank you all for the comments on your -- and on your outlook there especially. And understandably there's less visibility on the medium term around housing, as you mentioned, but Michael, you touched on it briefly, but could you go into more detail about any changes that that you would make to on how you run the business in a softer demand environment? Controlling what you can control as you said there, but just -- again, you touched on it but a little more detail on that would be it'd be great. Michael Haack: Yes, Trey, what we do is we've historically done with any cycle, as you know, we monitor our demand profile, which right now our demands are strong across both businesses, but we monitor those demand profiles and we could we can shift with those demand profiles to make sure we continue to operate the operations effectively. A lot of our businesses, especially on the wallboard side, are more people-dependent than anything else and we do not tend to overstaffed during the heavy times versus the light times with it. So, we run very lean. The other thing that we're doing that Craig mentioned briefly in his comments was looking out at our fuels and some hedging opportunities and everything else to control some of our heavier cost input areas. What also should be remembered is we control our raw material input on the side. So, we are not up for those swings if those prices do change. So, we monitor the whole supply chain and we monitor how we operate those facilities and we have mechanisms in place if there was a demand change, but right now, we're seeing strong demand as we said. Trey Grooms: Right. Okay. Thank you for that. And that kind of leads into a follow-up there is the -- on the wallboard business, you mentioned the backlog there, -- excuse me the backlog at the homebuilders, the construction, and the catch-up, you expect that to, kind of, hold the volume or the demand for wallboard here through this year. So, is that to say what we've seen recently kind of low the mids on the volume is kind of the expectation as we look through the balance of the calendar year, given that backlog? Michael Haack: How I look at it, Trey is the backlog is there on the homebuilding side of it and as long as the demand profiles on the house building and everything stay that should support us through this this year at, kind of, our run rate we're seeing today. Trey Grooms: Perfect. Fair enough. And last one for me is on the energy side, and Craig, you touched on some things you're doing there. But the nat gas prices have been extremely violent. And obviously that's a headwind, but can you talk about that -- what we've seen in nat gas prices combined with some of the walked in portion of your nat gas needs, also kind of taken into consideration some of the pricing actions you have in place, how we should be thinking about margins and kind of near-term, maybe even medium term given this this backdrop? Craig Kesler: Yes, and Trey just to clarify, right, natural gas is the predominant fuel in wallboard and paper, whereas on the cement side, it's generally a solid fuel consumption, coal pet coke, things like that. So, on the wallboard, and paper side with nat gas, as I mentioned, we've got about 40% of our needs hedged at under $4 or $5 for the remainder of the year. And importantly, that is sustained through the winter at that level, where you could see some different changes in that gas prices. But as we've -- and on the cement side, our solid fuel is generally locked in for the remainder of the year. That's generally how we do these annual contracts in cement. I will tell you as we look out into calendar 2023 or for what us for us would be fiscal 2024, we do see continued elevation in fuel prices for the cement business. A little too early to quantify that, but it is something that we are monitoring. But take all of that against the environment that we're operating in where we've been able to achieve good price increases across all these businesses and certainly the demand environment is very supportive of that with very high utilization rates across the network, but there's no doubt a portion of those are also associated with these inflation costs around energy. And so as we pointed out this quarter, we've been able to raise prices ahead of this inflation this year-to-date and we've got additional price increases slated for this summer and in both cement and wallboard. So, at this point, we've been able to manage and keep up with inflation. Trey Grooms: Okay. Thanks for the detail on that, Craig and I'll pass it along. Good luck. Thank you. Operator: Next with Brent Thielman of D.A. Davidson. Brent Thielman: Hey great. Thank you. Michael or Craig, strength and resiliency of wallboard pricing, especially that downbeat environment is pretty notable, I guess, any future plans or announcements you can share? And then I just be curious, your thoughts how you think about the industry, sort of, maintaining these higher levels in terms of pricing and in sort of a softer landing housing scenario? Michael Haack: Yes, it's a good question. As I said in my opening comments with the backlog out there, we see kind of a floor through the short-term area with it. We were able to -- actually we've announced price increase on the wallboard side. We're working through with our customers right now. So, the demand profile is still supportive. And we we're not seeing -- we're still on a high demand cycle right now on our wallboard operations. And like I said, we see that with a for established for the backlog there. Craig Kesler: Yes, Brent, what I would also add to that is a couple of thoughts. One is certainly think about our markets, we're in some of the stronger markets across the U.S. generally in the southern half of the U.S. where demographic trends and construction activity is stronger. There are -- and we've talked about it a lot over the years. Some of the raw material inputs that are diminishing in the eastern half of the U.S. specifically around synthetic gypsum continue to be a cost pressure for many not for us, we're generally a natural gas or natural gypsum oriented business. But there those are all things that you think about through a cycle and how that plays out on the wallboard business with limited supply expected in the future to come on. You're going to have higher utilizations throughout the cycle, which is something that is very different than what we've seen in the previous two cycles that gives us we think this business is much more sustainable, much more resilient than what we've seen in past cycles. Brent Thielman: And maybe to add to that, Michael or Craig, I guess just that you think about the competitive landscape evolution that's happened there. Since the last time we went through a rising rate environment and housing down cycle, does that -- and any thoughts on that and how that might affect your approach to pricing? Craig Kesler: Yes, look, we generally don't talk about competitors. I just would say if you think about the last two cycles and wallboard, you're talking about the late 1990s, early 2000s and then the mid-2000s. In both of those cases, we saw a significant amount of new supply being added to the wallboard business. With the increasing supply of synthetic gypsum. We sit in a very different spot today with synthetic gypsum diminishing and availability as coal-fired power plant production has gone down. And so we don't have see any significant new supply coming onto the market over the next several years that that is a very different environment than what we've operated in prior cycles. That's -- that should have a different outcome. And look, I think it's a little too early to make any decisions or confirmations around the demand profile for this cycle. There's still a lot of moving parts here. Brent Thielman: Yes, fair enough and appreciate that. Just on cement, maybe a refresh of the magnitude of the price increases this month and whether that's across the entire footprint? Craig Kesler: It's across nearly the entire footprint. Not every market for us, but the most markets and it's again, it's another double-digit price increase that was slated for early July. Brent Thielman: Okay, great. Thank you guys. Operator: The next question we have will come from Anthony Pettinari of Citigroup. Unidentified Analyst: Hi, this is on for Anthony. Thanks for taking my questions. You talked about PLC in your prepared remarks, but can you the key just up to the sort of on the path to getting towards the full -- use that a PLC Where are you on that? And then maybe it's the bottleneck still sort of states recognizing that they can get so allowing that? Michael Haack: Yes, I could give you a little color around that, kind of when you look at PLC, there's multiple aspects to deploying PLC, one of them is with states and DoTs and everything we're really far along on that with almost all of our businesses having approved PLC with state DoTs in their areas. The second part really is there is a change to the manufacturing process of where you got to introduce a limestone into a grinding circuit with it. So, there's some capital outlay that we've been doing and each plant will have kind of a different timeline to become 100% PLC compliant. We're actually ahead of schedule for what we've been talking about before with 15% of our market or our sales this quarter being PLC. I do see that accelerating, getting to the 100% PLC. We'll be more dependent on supply chain delivery of products, but we will make substantial progress to get there in the in the near-term and then in the mid-term, we should we should have everybody converted over as those projects come online. Unidentified Analyst: Great. Thanks. And then separately, can you guys talked about infrastructure spending is sort of largely set for the next couple of years, which is encouraging. But that largely locked in in terms of dollars of spending or maybe projects in the pipeline. Because if it's the former, then if you see it all sort of price inflation persisting at these strong levels, because some of that rising price may be erode the volumes that would have been implied in those spending budgets. Craig Kesler: Yes. No, that's not exactly how we think about it. There's lots of inputs into these construction jobs. And this is a multi-year bill, that is in addition to state and local spending on infrastructure projects. So, based on the lettings that we're seeing from the markets that we're in, we are expecting to see good momentum and good demand from that bill and playing out for several years. Unidentified Analyst: Okay, thanks. That's really helpful. I'll turn it over. Operator: And the next question we have will come from Jerry Revich of Goldman Sachs. Please go ahead. Jerry Revich: Yes. Hi. Good morning, everyone. Michael Haack: Good morning. Jerry Revich: I'm wondering if you could talk about your expectations of price realization in cement relative to the double-digit numbers that you spoke about, Craig. I think in the past, you folks have essentially gotten, 70% of what you've asked for, and I'm wondering, to what extent could that be moving higher in this environment, given the inflationary pressures that everybody's facing in a 15% price increase that was just reported by one of your competitors this morning? Michael Haack: Yes, when we look at it, it's too early to tell right now with we're working through with our customers right now. But how to answer that question more is if you look at the demand profile for our products, we're in a near sold out position -- really at a sold out position with a lot of our plants. So, the demand profile is very supportive of this price increase. So, I won't give you a specific number on that. But we have expectations with the demand profile where we'll land. Jerry Revich: Okay. And can we talk about it in wallboard, when we looked at the last available, financials for your biggest competitor, you folks had enjoyed about a 20 point margin gap five years ago, because of the co-located strategy. And given the transportation cost moves over the past five years, that gap looks to be about 25% today. I'm wondering what is your benchmarking analysis show relative to their cost structure because, obviously, when people look at the margins that you folks are putting up in wallboard, there's a question of what the next trough might look like. So, any comments you can make on the cost structure advantages you see it now would be helpful? Craig Kesler: Yes, Jerry, it's all aspects of the operations where we see an advantage. And it starts with pulling the rock out of the ground, right, we largely own or control our primary raw material gypsum in this case, close to our facilities with 40, 50 years of supply of those raw materials. So, it starts there, but energy consumption, we talk about the hedging that we've done. But in reality, the best hedge is just not using natural gas and we've taken energy consumption out of the business over the last five years -- the last 10 years, so that we're more efficient on energy consumption. The paper mill, we've talked about that a lot that is continues to be a strategic advantage for us providing a lower cost paper, but a better paper for a wallboard plant. So, we think as you think through the entire operating system, we've continued to improve our low cost operations. Again, try not to compare ourselves directly to competitors, but we know what we've done to our business to make it more resilient, more sustainable through a cycle. The Georgetown plant, we did operate in prior cycles out in the southeast. That plant is one of our -- is our lowest cost plant and that's putting into a network that was already low-cost. So, again, we think we've actually -- and then you just think about some of the other pressures we've talked about synthetic gypsum quite a bit and our exposure to that is relatively limited. So, you just think about the cost curve and where we sit on it. We think we've actually improved our position. Jerry Revich: And, Craig, it is possible to quantify that based on a qualitative discussion that sounds like it's higher than at five-point gap that the pure transportation element would suggest. Is that fair? Craig Kesler: Yes. Not willing to quantify it for this purpose, but we know where we sit on the curve and we've continued to expand our competitive position. Jerry Revich: Okay, super. And lastly, in the press release, you folks spoke about a project delay, can you just give us a bit more context on where that is and a bit more color on the drivers? Craig Kesler: Yes, just in the central part of the U.S., I think you're hearing it from a number of people this this cycle where there were some rain and weather events in the central part of the U.S. for us, that's Missouri, Kansas, Illinois, that area, just pushes projects out and we see that from time-to-time. Jerry Revich: Appreciate the discussion. Thanks. Craig Kesler: Thanks Jerry. Operator: The next question we have will come from Phil Ng of Jefferies. Unidentified Analyst: Hey, good morning. This is actually a Colin on for Phil. Thanks for taking my questions. Just starting with cement with IJA funding coming through next year and a potential slowdown in housing, I guess, how are you looking out to maybe calendar year 2023 and cement volumes holding up in that type of backdrop? Craig Kesler: Yes, I think we would tell you, we expect to continue to see very good demand, strong demand for cement and continued very high utilization rates across our network given all of those things that you just commented on. And look I'll add to that the private non-res sector, which has continued to see improving numbers across the board. Unidentified Analyst: Okay, and just following up on the non-res comment you just made there. I guess, is there any particular sectors that are seeing strength versus others that are seeing weakness that you would call out? Craig Kesler: Yes look, I think if you look across the ABI you'll across the Dodge Index, those numbers have continued to improve and are operating above expansion periods. And look data warehouses, those type of activities are very, very strong. And but even their strength across some of the other sectors that had been weak during the COVID period. Unidentified Analyst: Great. And then my last question is just on the August wallboard price increase, just given the move into the natural gas prices? Do you need the August wallboard increase to keep margins intact? Or would that provide some opportunity for margin expansion through the rest of the fiscal year? Craig Kesler: Yes, look the recent move in natural gas has certainly continued to put some upward pressure on our cost structure. And so it's a balance of any OCC is still at a relatively high level. So, we're going into it with the expectation that we should achieve a decent amount of it and we'll see where it all lands. Unidentified Analyst: Great. Thank you for taking my questions. Operator: Next, we have Paul Roger of BNP. Unidentified Analyst: Hi, guys. Thanks for taking my question. This is actually George speak on behalf of Paul. So, I'll just ask a quick question on demand. So, you've touched on the kind of macro headwinds and potential slowdown on the residential side. And I appreciate long backlogs mean that you're not necessarily sort of experiencing all of that just yet. But are you seeing any early signs of a slowdown, maybe some sort of cancellations and projects or postponements or any just sort of incrementally more negative conversations with customers? Michael Haack: No, I'll answer that is I'm not going to speculate on some of the future stuff with it. As I said, in my comments during this through this short-term area with the demand profile looks strong. As you stated, we got some inflationary pressures and we're putting out our price increase with it. We expect to realize that because the demand profile. The midterm is really still the midterm. In my comments I said, that's one that the consumer is going to define the midterm more than anything. So, we feel comfortable in the short-term and the long-term outlook and there's a little murkiness in the midterm and we'll handle that as it comes. Unidentified Analyst: Okay. And then sort of similar theme, but as it relates to M&A, so does there's a sort of the uncertainty in the midterm effects your M&A pipeline, or is there deals that you're exploring at the moment? Maybe just a bit of color on what that pipeline looks like? Michael Haack: Yes. So, we're always active in the M&A market. We look at a lot of opportunities with it. We have strict objectives with that and criteria on when we do an M&A. We're not going to grow for growth's sake, we're going to look at deals that make sense for us that, extend our reach our markets and grow our business on the heavy side of the business. If one of those was to come available today, we'd be interested in those. It's just we're active in that market and will remain active in that market as long as it meets our strategic criteria. Unidentified Analyst: Okay. Thanks. Appreciate your time. Operator: Well, sir, no further questions at this time, we will go ahead and conclude our question-and-answer session. I would now like to turn the conference call back over to Mr. Michael Haack for any closing remarks. Sir? Michael Haack: Thank you for joining us today for the call and we look forward to talking to you at the end of next quarter in November. Operator: And we thank you sir, to the rest of the management team, for your time also today. The conference call is now included. At this time, you may disconnect your lines. Thank you. Take care and have a wonderful and blessed day everyone.
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%.
