Reflecting On Building Materials Stocks’ Q4 Earnings: Valmont (NYSE:VMI)
As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the building materials industry, including Valmont (NYSE:VMI) and its peers.
Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.
The 9 building materials stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.8% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Valmont (NYSE:VMI)
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.
Valmont reported revenues of $1.04 billion, up 2.1% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ organic revenue and adjusted operating income estimates.
President and Chief Executive Officer Avner M. Applbaum commented, “The fourth quarter capped off an outstanding year for Valmont as we continued executing our strategy. Both our Infrastructure and Agriculture segments achieved sales growth, and we expanded consolidated operating profit margins year-over-year through strategic pricing, improved operational efficiencies, and disciplined cost management. I want to thank the entire Valmont team for their dedication and hard work in delivering these strong results.”
Valmont Total Revenue
Valmont delivered the weakest full-year guidance update of the whole group. The stock is up 3.7% since reporting and currently trades at $331.75.
Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Vulcan Materials reported revenues of $1.85 billion, up 1.1% year on year, outperforming analysts’ expectations by 2.1%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates.
Vulcan Materials Total Revenue
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 10.8% since reporting. It currently trades at $241.15.
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE:CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Carlisle reported revenues of $1.12 billion, flat year on year, falling short of analysts’ expectations by 1.9%. It was a slower quarter as it posted a miss of analysts’ EBITDA and organic revenue estimates.
Carlisle delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.7% since the results and currently trades at $351.
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Resideo reported revenues of $1.86 billion, up 20.9% year on year. This result topped analysts’ expectations by 1.1%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ EPS estimates.
The stock is down 16.1% since reporting and currently trades at $18.02.
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $367.7 million, up 17.7% year on year. This print surpassed analysts’ expectations by 4.4%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ organic revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
Armstrong World achieved the highest full-year guidance raise among its peers. The stock is down 1.1% since reporting and currently trades at $144.19.
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