Advanced Drainage Systems, Inc. WMS reported dismal results for the fourth quarter of fiscal 2025. Its adjusted earnings and net sales lagged the Zacks Consensus Estimate and tumbled on a year-over-year basis.
The gloomy quarterly performance reflects unfavorable impacts from higher interest rates and ongoing economic uncertainties. Moreover, adverse winter weather conditions this year against a favorable scenario in the year-ago quarter made comparisons weak, thus adding to the headwinds.
Moving into fiscal 2026, the end-market outlook remains sluggish. However, the company’s diversified market exposure across the United States, distinctive product mix, material conversion strategy and product innovation strategies position it well for navigating the market uncertainties.
Shares of this innovative water management solutions provider have lost 3.4% during yesterday’s trading hours, after the earnings announcement.
Inside WMS’ Headlines
The company reported adjusted earnings per share (EPS) of $1.03, which missed the Zacks Consensus Estimate of $1.09 by 5.5%. In the year-ago quarter, it reported an adjusted EPS of $1.23.
Net sales of $615.8 million also missed the consensus mark of $659 million by 6.5% and declined 5.8% year over year. The overall decline was due to weather-related demand weakness in the United States construction and agriculture end markets.
Advanced Drainage Systems, Inc. Price, Consensus and EPS Surprise
Advanced Drainage Systems, Inc. Price, Consensus and EPS Surprise
Advanced Drainage Systems, Inc. price-consensus-eps-surprise-chart | Advanced Drainage Systems, Inc. Quote
Gross profit decreased 10.2% to $226.3 million due to unfavorable volume and price mix, and material costs, partially offset by an improvement in manufacturing and transportation costs attributable to better fixed cost absorption and increased productivity.
Selling, general and administrative (SG&A) expenses, as a percentage of net sales, contracted 70 basis points (bps) year over year to 14.8%.
Adjusted EBITDA tumbled 7.6% year over year to $176.7 million. Adjusted EBITDA margin contracted 50 bps to 28.7% compared with 29.2% reported last year.
Advanced Drainage Systems’ Segment Details
Net sales from external customers for the Pipe segment declined 11.3% year over year to $318.1 million from $358.7 million.
Infiltrator Water Technologies’ net sales from external customers rose 15.3% year over year to $122.3 million.
Net sales from external customers for the International segment tumbled 17.6% from the year-ago figure to $30 million.
The Allied Products & Other segment’s net sales from external customers totaled $145.4 million, which deteriorated 4.8% year over year from $152.7 million.
WMS’ Fiscal 2025 Glimpse
The company generated net sales of $2.9 billion, which inched up 1% from fiscal 2024, driven by growth in the Infiltrator business and Allied products portfolio, alongside favorable material conversion in the U.S. construction end markets.
Adjusted EPS of $5.89 decreased from $6.39 reported a year ago.
Adjusted EBITDA tumbled 3.7% to $889.2 million and adjusted EBITDA margin was 30.6%, down 150 bps year over year.
WMS’ Financial Highlights
As of March 31, 2025, the company had total liquidity of $1.1 billion, including cash of $463.3 million, compared with $490.2 million at the fiscal 2024-end. Long-term debt as of the same date was $1.25 billion, slightly down from $1.26 billion at fiscal 2024-end.
At fiscal 2025-end, net cash provided by operating activities was $581.5 million, down from $717.9 million as of fiscal 2024.
During fiscal 2025, Advanced Drainage Systems repurchased 0.4 million shares of its common stock for $69.9 million. As of March 31, it had $147.7 million remaining under its share repurchase authorization.
WMS Unveils Fiscal 2026 Guidance
Owing to current market visibility, the backlog of existing orders and business trends, the company expects net sales to be in the range of $2.825-$2.975 billion.
Adjusted EBITDA is expected to be in the range of $850-$910 million.
Capital expenditures are likely to be approximately $275 million.
WMS’ Zacks Rank & Recent Construction Releases
Advanced Drainage Systems currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Owens Corning OC reported better-than-expected results for first-quarter 2025, wherein adjusted earnings and net sales surpassed the Zacks Consensus Estimate. This marks the 24th consecutive earnings beat for the company. Year over year, the top line grew while the bottom line declined.
The quarter’s performance was attributable to strong commercial and operational execution in mixed markets, including positive price-cost mix. During the quarter, the top line witnessed an uptrend mainly due to strong contributions from the Roofing and Doors segments, somewhat offset by softer performance of the Insulation segment. Despite the several external challenges, Owens Corning will focus on growing its business and profitability through 2025.
TopBuild Corp. BLD reported mixed results for the first quarter of 2025, wherein its adjusted earnings topped the Zacks Consensus Estimate and the net sales missed the same. Year over year, both metrics declined.
The quarterly performance reflects lower sales volume in the Installation segment, mainly due to softened housing demand caused by affordability concerns. However, strength in the Specialty Distribution segment somewhat offset the downward trend during the quarter. TopBuild remains optimistic about its opportunities in the maintenance and repair needs in the commercial and industrial sectors, along with the long-term growth expectations in the residential market.
Gibraltar Industries, Inc.’s ROCK first-quarter 2025 adjusted earnings topped the Zacks Consensus Estimate and grew year over year. On the other hand, net sales missed the consensus mark and tumbled year over year.
Gibraltar’s quarterly results reflect stable demand and performance in line with internal plans. Backlog increased 30% year over year to $434 million, reaching a record high. The company reported solid contributions from the Lane Supply acquisition. It also carried out restructuring actions and completed two additional acquisitions in the Residential segment to expand its presence in the metal roofing market.
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