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Quanex (NX) Q2 Earnings Beat Estimates, Sales Miss, Stock Up
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Quanex Building Products Corporation (NX - Free Report) reported mixed results in second-quarter fiscal 2024 (ended Apr 30, 2024). Its earnings surpassed the Zacks Consensus Estimate and net sales missed the same. On a year-over-year basis, net sales declined while earnings remained in line with the year-ago figures.
Shares of the company rose 6% in the after-hours trading session on Jun 6 after the news release.
Inside the Headlines
Adjusted earnings of 66 cents per share surpassed the consensus estimate of 53 cents by 24.5%. The upside can be attributed to a decline in raw material costs, lower income tax expenses and reduced interest expenses.
Quanex Building Products Corporation Price, Consensus and EPS Surprise
Quanex reported net sales of $266.2 million, missing the consensus mark of $268.8 million by 1% and declining 2.7% from the year-ago period’s figures. The downside was due to weaker market demand in the company's European Fenestration and North American Cabinet Components segments.
Gross margin in the quarter was 24.9%, which expanded 30 basis points (bps) from the prior-year period’s tally. Adjusted EBITDA margin came in at 15%, reflecting a 40 bps increase from the year-ago figure of 14.6%.
Segmental Information
North American Fenestration: For the reported quarter, net sales in the segment increased 1.8% from the prior-year period to $159.8 million. The upside was backed by improved volume. Adjusted EBITDA margin was up 190 bps from a year ago to 14.9%.
European Fenestration: The segment’s sales decreased 10.4% (excluding foreign exchange impact) year-over-year to $56.6 million due to lower volume and decreased pricing related to raw material index pricing mechanisms. The adjusted EBITDA margin fell 30 bps year over year to 23%.
North American Cabinet Components: Net sales in the segment were $51.1 million, down 4.6% from $53.5 million reported a year ago due to lower volume and pricing pressure. Adjusted EBITDA margin of 9.8% was up 230 bps year-over-year.
Financial Update
As of Apr 30, 2024, Quanex had cash and cash equivalents of $56.1 million compared with $58.5 million at fiscal 2023-end. Long-term debt was $51.5 million as of Apr 30, 2024, compared with $66.4 million at fiscal 2023-end.
Cash provided by operations was $36.9 million in the first six months of fiscal 2024 compared with $38.5 million recorded in the comparable prior-year period. Free cash flow was $25.5 million for the second quarter of fiscal 2024, down from $27.8 million a year ago.
Fiscal 2024 Outlook Retained
The company is reaffirming its prior guidance for the fiscal 2024. On a consolidated basis, it still expects net sales of approximately $1.1 billion, which is in line with the year-ago reported figures.
The company expects adjusted EBITDA to be approximately $145-$150 million, down from $159.6 million reported in the fiscal 2023.
Dycom Industries Inc. (DY - Free Report) reported strong results for first-quarter fiscal 2025 (ended Apr 27, 2024). Both the top and the bottom line surpassed their respective Zacks Consensus Estimate.
In May, the company acquired a telecommunications construction contractor that will expand its geographic footprint in Alaska.
MasTec, Inc. (MTZ - Free Report) reported better-than-expected results in first-quarter 2024, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.
The company’s results reflect solid contributions from its Oil and Gas segment, which were partially offset by soft contributions from the other reportable segments. The uptick in the Oil and Gas segment was attributable to higher levels of project activity, including project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence.
Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing and network & communications.
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Quanex (NX) Q2 Earnings Beat Estimates, Sales Miss, Stock Up
Quanex Building Products Corporation (NX - Free Report) reported mixed results in second-quarter fiscal 2024 (ended Apr 30, 2024). Its earnings surpassed the Zacks Consensus Estimate and net sales missed the same. On a year-over-year basis, net sales declined while earnings remained in line with the year-ago figures.
Shares of the company rose 6% in the after-hours trading session on Jun 6 after the news release.
Inside the Headlines
Adjusted earnings of 66 cents per share surpassed the consensus estimate of 53 cents by 24.5%. The upside can be attributed to a decline in raw material costs, lower income tax expenses and reduced interest expenses.
Quanex Building Products Corporation Price, Consensus and EPS Surprise
Quanex Building Products Corporation price-consensus-eps-surprise-chart | Quanex Building Products Corporation Quote
Quanex reported net sales of $266.2 million, missing the consensus mark of $268.8 million by 1% and declining 2.7% from the year-ago period’s figures. The downside was due to weaker market demand in the company's European Fenestration and North American Cabinet Components segments.
Gross margin in the quarter was 24.9%, which expanded 30 basis points (bps) from the prior-year period’s tally. Adjusted EBITDA margin came in at 15%, reflecting a 40 bps increase from the year-ago figure of 14.6%.
Segmental Information
North American Fenestration: For the reported quarter, net sales in the segment increased 1.8% from the prior-year period to $159.8 million. The upside was backed by improved volume. Adjusted EBITDA margin was up 190 bps from a year ago to 14.9%.
European Fenestration: The segment’s sales decreased 10.4% (excluding foreign exchange impact) year-over-year to $56.6 million due to lower volume and decreased pricing related to raw material index pricing mechanisms. The adjusted EBITDA margin fell 30 bps year over year to 23%.
North American Cabinet Components: Net sales in the segment were $51.1 million, down 4.6% from $53.5 million reported a year ago due to lower volume and pricing pressure. Adjusted EBITDA margin of 9.8% was up 230 bps year-over-year.
Financial Update
As of Apr 30, 2024, Quanex had cash and cash equivalents of $56.1 million compared with $58.5 million at fiscal 2023-end. Long-term debt was $51.5 million as of Apr 30, 2024, compared with $66.4 million at fiscal 2023-end.
Cash provided by operations was $36.9 million in the first six months of fiscal 2024 compared with $38.5 million recorded in the comparable prior-year period. Free cash flow was $25.5 million for the second quarter of fiscal 2024, down from $27.8 million a year ago.
Fiscal 2024 Outlook Retained
The company is reaffirming its prior guidance for the fiscal 2024. On a consolidated basis, it still expects net sales of approximately $1.1 billion, which is in line with the year-ago reported figures.
The company expects adjusted EBITDA to be approximately $145-$150 million, down from $159.6 million reported in the fiscal 2023.
Zacks Rank
Quanex currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Construction Releases
Dycom Industries Inc. (DY - Free Report) reported strong results for first-quarter fiscal 2025 (ended Apr 27, 2024). Both the top and the bottom line surpassed their respective Zacks Consensus Estimate.
In May, the company acquired a telecommunications construction contractor that will expand its geographic footprint in Alaska.
MasTec, Inc. (MTZ - Free Report) reported better-than-expected results in first-quarter 2024, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.
The company’s results reflect solid contributions from its Oil and Gas segment, which were partially offset by soft contributions from the other reportable segments. The uptick in the Oil and Gas segment was attributable to higher levels of project activity, including project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence.
Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing and network & communications.