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In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 50% and were flat year over year. Net sales also topped the consensus mark by 2.7% but decreased 8.7% year over year.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) remained stable at 53 cents in the past 60 days. The estimated figure indicates a 19.7% decline from the year-ago quarter’s level.
Quanex Building Products Corporation Price and EPS Surprise
The consensus mark for net sales is pegged at $268.8 million, indicating a 1.7% decrease from the year-ago reported figure.
Key Factors to Note
Quanex’s fiscal second-quarter revenues are expected to have declined due to soft demand and lower pricing, mostly in the North America Cabinet Component segment. Also, a more normal seasonal pattern and declined customer inventory levels are added headwinds for the top line.
Although the overall demand pattern is improving gradually, especially in the United States, the ongoing wars in Ukraine and Gaza and continued pressure on energy costs in these regions are likely to have affected Europe’s business. Also, inflationary pressures and labor woes are likely to have been reflected in the fiscal second-quarter bottom line.
The company is witnessing input cost pricing pressures for its films and engineered adhesives, as well as some of the chemical feedstocks. Additionally, an increase in international shipping costs due to the disrupted shipping lanes in the Middle East and other macroeconomic woes are potential headwinds.
However, the company’s robust business strategy and cost-containment efforts are likely to have offset these headwinds to some extent in the quarter to be reported.
For the fiscal second quarter, NX expects total revenues to be flat to down 2% year over year. Segment-wise, it expects revenues to increase between 2% and 4% in the North American Fenestration segment, down 2-4% in the European Fenestration segment, and down 11-13% in the North American Cabinet Component segment.
Adjusted EBITDA margin is expected to be down 100-150 basis points in the fiscal second quarter.
The Zacks Consensus Estimate for North American Fenestration’s sales is pegged at $162 million, which indicates growth from $157 million year over year. The same for European Fenestration sales is currently pegged at $62 million, which suggests a fall from the prior-year quarter’s level of $63.8 million. The consensus mark for the North American Cabinet Components segment sales is currently pegged at $46.3 million, indicating year-over-year decline from $53.5 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Quanex this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, NX carries a Zacks Rank #2.
Stocks to Consider
Investors interested in some better-ranked stocks can consider the following:
Frontdoor, Inc. (FTDR - Free Report) : Based in Memphis, TN, the company provides home service plans in the United States. The firm is benefiting from impressive customer retention rates. Thanks to the robust awareness of the Frontdoor brand, it has been shifting its attention toward capitalizing on customer demand.
Frontdoor’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 286.8%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Armstrong World Industries, Inc. (AWI - Free Report) : Pennsylvania-based Armstrong World is a leading global producer of ceiling systems for use primarily in the construction and renovation of commercial, institutional and residential buildings. Currently, it has a Zacks Rank of 2.
AWI has a solid earnings surprise history. Its EPS surpassed the consensus estimate in the trailing four quarters, with an average of 15.2%.
Arcosa, Inc. (ACA - Free Report) : This Dallas, TX-based company provides infrastructure-related products and solutions. The company remains focused on its long-term vision to lessen the complexity of Arcosa’s overall portfolio and shift its business mix toward less cyclical, higher-margin growth opportunities that leverage core strengths and drive long-term shareholder value creation.
Arcosa’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 43.9%. It currently carries a Zacks Rank #2.
Image: Bigstock
Quanex (NX) Gears Up to Report Q2 Earnings: What's in Store?
Quanex Building Products Corporation (NX - Free Report) is scheduled to report second-quarter fiscal 2024 results on Jun 6, after the closing bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 50% and were flat year over year. Net sales also topped the consensus mark by 2.7% but decreased 8.7% year over year.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) remained stable at 53 cents in the past 60 days. The estimated figure indicates a 19.7% decline from the year-ago quarter’s level.
Quanex Building Products Corporation Price and EPS Surprise
Quanex Building Products Corporation price-eps-surprise | Quanex Building Products Corporation Quote
The consensus mark for net sales is pegged at $268.8 million, indicating a 1.7% decrease from the year-ago reported figure.
Key Factors to Note
Quanex’s fiscal second-quarter revenues are expected to have declined due to soft demand and lower pricing, mostly in the North America Cabinet Component segment. Also, a more normal seasonal pattern and declined customer inventory levels are added headwinds for the top line.
Although the overall demand pattern is improving gradually, especially in the United States, the ongoing wars in Ukraine and Gaza and continued pressure on energy costs in these regions are likely to have affected Europe’s business. Also, inflationary pressures and labor woes are likely to have been reflected in the fiscal second-quarter bottom line.
The company is witnessing input cost pricing pressures for its films and engineered adhesives, as well as some of the chemical feedstocks. Additionally, an increase in international shipping costs due to the disrupted shipping lanes in the Middle East and other macroeconomic woes are potential headwinds.
However, the company’s robust business strategy and cost-containment efforts are likely to have offset these headwinds to some extent in the quarter to be reported.
For the fiscal second quarter, NX expects total revenues to be flat to down 2% year over year. Segment-wise, it expects revenues to increase between 2% and 4% in the North American Fenestration segment, down 2-4% in the European Fenestration segment, and down 11-13% in the North American Cabinet Component segment.
Adjusted EBITDA margin is expected to be down 100-150 basis points in the fiscal second quarter.
The Zacks Consensus Estimate for North American Fenestration’s sales is pegged at $162 million, which indicates growth from $157 million year over year. The same for European Fenestration sales is currently pegged at $62 million, which suggests a fall from the prior-year quarter’s level of $63.8 million. The consensus mark for the North American Cabinet Components segment sales is currently pegged at $46.3 million, indicating year-over-year decline from $53.5 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Quanex this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, NX carries a Zacks Rank #2.
Stocks to Consider
Investors interested in some better-ranked stocks can consider the following:
Frontdoor, Inc. (FTDR - Free Report) : Based in Memphis, TN, the company provides home service plans in the United States. The firm is benefiting from impressive customer retention rates. Thanks to the robust awareness of the Frontdoor brand, it has been shifting its attention toward capitalizing on customer demand.
Frontdoor’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 286.8%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Armstrong World Industries, Inc. (AWI - Free Report) : Pennsylvania-based Armstrong World is a leading global producer of ceiling systems for use primarily in the construction and renovation of commercial, institutional and residential buildings. Currently, it has a Zacks Rank of 2.
AWI has a solid earnings surprise history. Its EPS surpassed the consensus estimate in the trailing four quarters, with an average of 15.2%.
Arcosa, Inc. (ACA - Free Report) : This Dallas, TX-based company provides infrastructure-related products and solutions. The company remains focused on its long-term vision to lessen the complexity of Arcosa’s overall portfolio and shift its business mix toward less cyclical, higher-margin growth opportunities that leverage core strengths and drive long-term shareholder value creation.
Arcosa’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 43.9%. It currently carries a Zacks Rank #2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.