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A month has gone by since the last earnings report for Gibraltar Industries (ROCK). Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Gibraltar Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Gibraltar's Q3 Earnings Beat, Sales Miss Estimates
Gibraltar Industries, Inc. reported mixed third-quarter 2024 results. Earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Gibraltar’s third-quarter performance was aligned with forecasts, with Renewables and Residential segments meeting expectations and Agtech sales rising more than 30%. Improved margins across three of four segments generated $65 million in cash flow, supported by strong execution and effective working capital management.
CEO Bill Bosway emphasized that despite challenging market conditions, Gibraltar remains positioned for earnings growth this year. The company continues to focus on operational improvements and expanding customer relationships to navigate current market dynamics.
Inside ROCK’s Headlines
Gibraltar’s adjusted earnings per share (EPS) of $1.27 beat the Zacks Consensus Estimate of $1.26 but decreased by 7.3% year over year.
Net sales of $361.2 million lagged the consensus mark of $362 million and decreased 7.6% from the prior-year level of $390.7 million due to challenges in the solar industry affecting the Renewables segment and a slowdown in the Residential market, with some offset from growth in Agtech. On an adjusted basis, the top line fell 6.2% year over year.
Segmental Details
Renewable Energy: Net sales in the segment dropped 21% from the year-ago quarter to $84.1 million (down 17.2% on an adjusted basis). Net sales and new project bookings were affected by trade and regulatory challenges from two AD/CVD investigations, as the industry focuses on panel installations and reporting requirements before the Dec. 3, 2024, tariff moratorium expiration. The backlog declined by 24%.
The adjusted operating margin of 6.5% contracted 1,040 basis points (bps) year over year due to an unfavorable product mix. The adjusted EBITDA margin decreased from 19% in the prior-year quarter to 9.3%.
Residential Products: Net sales in the segment were down 6.7% year over year to $212.4 million due to a sluggish residential market, particularly in the repair and remodel sector.
However, an adjusted operating margin of 19.9% expanded 110 bps in the quarter due to solid execution, 80/20 initiatives and effective price/cost management. The adjusted EBITDA margin expanded from 20.2% from the prior-year quarter to 21.4%.
Agtech: Sales grew 30.9% year over year, and adjusted sales rose 34.3% to $41.5 million. The upside was driven by accelerating projects in the Produce division, including facilities for growing strawberries, lettuce, melons and vine crops.
The adjusted operating margin expanded 450 bps year over year to 10.1% due to volume, product mix, 80/20 initiatives and solid field execution. The adjusted EBITDA margin expanded from 8.1% a year ago to 12.2%.
Infrastructure: Sales in the segment dropped 7.2% year over year to $23.2 million, impacted by the timing of a large project in the prior year. However, the backlog grew 3%, with strong demand and quoting activity driven by continued federal and state investment.
The adjusted operating margin of 27.9% expanded 230 bps year over year, fueled by a favorable product mix, the launch of new products, the impact of 80/20 initiatives and effective execution. The adjusted EBITDA margin expanded from 29.1% in the prior-year quarter to 31.4%.