Beacon Roofing Supply, Inc. BECN reported strong results for third-quarter 2022. Both earnings and revenues surpassed their respective Zacks Consensus Estimate and increased significantly on a year-over-year basis. The solid results were backed by strong net sales and operational improvement.
Shares of the company jumped 2.3% in the after-hour trading session on Nov 3, 2022.
Julian Francis, Beacon’s president and CEO, said, “We continued to deliver value to our customers, driving record third quarter net income and our 11th straight quarter of year-over-year increases in Adjusted EBITDA. At the same time, we continued making strategic investments toward achieving our Ambition 2025 growth and margin targets.”
Earnings & Revenue Discussion
This distributor of residential and non-residential roofing materials reported adjusted earnings of $2.25 per share, which topped the consensus mark of $2.10 by 7.1%.
For the quarter, net sales of $2.42 billion surpassed the consensus mark of $2.35 billion by 3%. The top line grew 28.8% on a year-over-year basis as sales increased across all three lines of business, given the higher pricing. Higher demand for residential roofing and complementary products also contributed to growth.
During the quarter, the weighted-average selling price increased 20-21% and volumes rose 7-8%.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Beacon Roofing Supply, Inc. price-consensus-eps-surprise-chart | Beacon Roofing Supply, Inc. Quote
Sales According to Line of Business
Residential Roofing Product: For the reported quarter, sales of this product (comprising 50% of the quarterly net sales) were $1.2 billion, up 21.5% from the prior year.
Non-Residential Roofing Product: Sales (comprising 30% of the quarterly net sales) increased 54.2% from the year-ago quarter to $731 million.
Complementary Product: For the quarter, sales of this product (comprising 20% of the quarterly net sales) increased 17% year over year to $476 billion.
The gross margin of 26.1% was down 100 basis points (bps) year over year, as product cost increases more than offset higher average selling prices for products, combined with the higher non-residential product sales mix. As a percentage of net sales, adjusted operating expenses declined to 15.5% from 17.1% a year ago, owing to the positive impact of net sales growth and productivity gains.
Adjusted EBITDA increased 36.6% on a year-over-year basis to $284.2 million, driven by higher net sales and favorable operating leverage. Adjusted EBITDA margin expanded 70 bps year over year to 11.8%.
Other Financial Details
As of Sep 30, 2022, the company had cash and cash equivalents of $84.9 million compared with $225.8 million at the 2021-end. Long-term debt, net was $1.61 billion, slightly down from $1.612 billion at 2021-end.
Net cash provided by operating activities was $81.2 million versus $117.1 million a year ago.
Zacks Rank & Peer Releases
Beacon Roofing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fastenal Company FAST reported third-quarter 2022 results, wherein earnings and revenues topped the respective Zacks Consensus Estimate. The company’s top and bottom lines also improved on a year-over-year basis, given the strong demand in markets associated with industrial capital goods and commodities.
FAST reported daily sales of $27.8 million, reflecting an increase of 18% year over year, in the reported quarter. The upside was mainly due to higher unit sales owing to good demand from industrial capital goods and commodities, which offset softer markets tied to consumer goods and relatively lower growth in construction.
United Rentals, Inc. URI reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Vulcan Materials Company VMC reported third-quarter 2022 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate. The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions, and a positive pricing environment, despite ongoing volatility in the macro environment and slowdown in single-family residential demand. However, higher diesel fuel costs and inflationary pressures for many other parts and supplies weighed on the bottom line.
For 2022, VMC now anticipates adjusted EBITDA in the range of $1.64-$1.68 billion versus $1.60-$1.70 billion expected earlier.
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