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Although both the earnings and net sales missed the Zacks Consensus Estimate, the bottom line strengthened on a year-over-year basis. Shares of the company rose 2% in the pre-market trading session on Jul 31.
ROCK has slightly reduced its net sales outlook for 2024 to reflect recent slower market conditions in both Residential and Renewables end markets, partially offset by strength in both Agtech and Infrastructure. Nonetheless, it remains focused on driving participation gains across the segments, with operational improvements to support solid second-half and full-year margin expansion and cash flow growth.
Inside the Headlines
Gibraltar’s adjusted earnings per share (EPS) of $1.18 missed the Zacks Consensus Estimate of $1.26 by 6.4% but increased year over year by 2.6%.
Gibraltar Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $353 million lagged the consensus mark of $370 million by 4.7% and decreased 3.3% from the prior-year level of $364.9 million due to a slowdown in the Residential market. On an adjusted basis, the top line fell 2% year over year.
Segmental Details
Renewable Energy: Net sales in the segment increased 2.5% from the year-ago quarter to $79.4 million (up 8.2% on an adjusted basis), driven by strong demand from new and existing customers for the new 1P tracker product. Despite a growing pipeline of new projects across all product lines, order backlog fell 10% as some customers paused signing new contracts as they worked through trade and/or regulatory items specific to their projects.
The adjusted operating margin of 7.8% contracted 270 basis points (bps) year over year due to an unfavorable product mix owing to the 1P tracker product moving through its launch process learning curve to permanently tooled production for suppliers and an efficient field installation process. The adjusted EBITDA margin decreased 290 bps from the prior-year quarter to 10.7%.
Residential Products: Net sales in the segment were down 6.1% year over year to $214.3 million. This was due to a slowing market and unexpected channel destocking in the second half of the quarter, partially offset by participation gains with new and existing customers, growth in ventilation product lines, and expansion initiatives in the Rocky Mountain region.
However, an adjusted operating margin of 20.3% expanded 100 bps in the quarter on the back of solid execution, 80/20 initiatives, and effective price/cost management. The adjusted EBITDA margin grew 120 bps from the prior-year quarter to 21.7%.
Agtech: Sales declined 1.4% year over year, but adjusted sales inched up 0.6% to $34.5 million. The downside was due to delayed new project construction. Backlogs increased an impressive 32% year over year on the back of solid new bookings, which reached $90 million in the quarter, representing nearly 400% growth sequentially.
The adjusted operating margin fell 290 bps year over year to 6.6%, mainly due to unfavorable project timing and mix. The adjusted EBITDA margin contracted 360 bps year over year to 9.3%.
Infrastructure: Sales in the segment rose 2.5% year over year to $24.8 million, driven by continued strong execution and market participation gains. Backlog, however, declined 12% due to a large project booked in 2023, which is reaching its final stages. On an impressive note, bookings increased 3% on a sequential basis, reflecting consistent customer activity.
The adjusted operating margin of 25.1% expanded 100 bps year over year, driven by price/cost alignment, ongoing strong execution, 80/20 productivity, and improving product mix. The adjusted EBITDA margin also expanded 70 bps from the prior-year quarter to 28.3%.
Operating Highlights
Adjusted operating income declined 4% to $47 million. The adjusted operating margin contracted 30 bps year over year to 13.4%.
Adjusted EBITDA fell 3% to $58 million in the reported period. The adjusted EBITDA margin also declined 10 bps from the prior year to 16.4%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Gibraltar had liquidity of $574 million, including cash and cash equivalents worth $179 million compared with $99.4 million at 2023-end. There was no long-term debt at the end of the second quarter.
In the first half of 2024, net cash provided by operating activities totaled $89.7 million compared with $114.1 million in the prior-year period.
2024 Guidance Updated
Gibraltar now expects net sales of $1.38-$1.42 billion versus the previous expectations of $1.43-$1.48 billion for 2024. The company reported $1.38 billion of net sales ($1.36 billion on an adjusted basis) in 2023.
GAAP EPS is still expected in the range of $4.04-$4.29 compared with $3.59 in 2023. Adjusted EPS is expected to be $4.57-$4.82 compared with $4.09 in 2023.
The company notified that Agtech bookings are up significantly and support strong revenue growth in the second half, and Infrastructure performance is expected to remain positive going forward. Also, demand and quoting remain strong within Infrastructure, and it expects order flow to increase in the second half of the year.
Masco Corporation (MAS - Free Report) reported strong earnings for the second quarter of 2024 amid challenging market conditions. Strong operational efficiency helped it deliver solid results.
However, net sales missed the analysts’ expectations and declined on a year-over-year basis. Masco’s focus on a balanced capital deployment strategy helped it return $206 million to shareholders via dividends and share repurchases. Masco narrowed its adjusted EPS guidance while the mid-point remains unaffected.
United Rentals, Inc. (URI - Free Report) reported mixed second-quarter 2024 results. The company’s EPS surpassed the Zacks Consensus Estimate, but revenues missed the same. Nonetheless, both metrics registered improvement on a year-over-year basis.
The company showcased robust second-quarter results for 2024, achieving record highs in revenues, adjusted EBITDA, and EPS. The company's performance aligns with its expectations for the year, driven by the successful integration of Yak. This acquisition enhances URI's strategy to expand its specialty rental business, enhance its one-stop-shop offerings, and leverage opportunities for both secular growth and cross-selling. The company's unwavering commitment to safety, operational excellence, and innovation underpins its unique value proposition, positioning it for long-term shareholder value.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in the second quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate and grew year over year. The company reported better-than-expected earnings in the trailing seven quarters.
However, quarterly net sales missed the consensus mark and declined on a year-over-year basis.
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Gibraltar (ROCK) Q2 Earnings Miss, Up Y/Y, Sales View Lowered
Gibraltar Industries, Inc. (ROCK - Free Report) reported strong second-quarter 2024 earnings despite top-line woes.
Although both the earnings and net sales missed the Zacks Consensus Estimate, the bottom line strengthened on a year-over-year basis. Shares of the company rose 2% in the pre-market trading session on Jul 31.
ROCK has slightly reduced its net sales outlook for 2024 to reflect recent slower market conditions in both Residential and Renewables end markets, partially offset by strength in both Agtech and Infrastructure. Nonetheless, it remains focused on driving participation gains across the segments, with operational improvements to support solid second-half and full-year margin expansion and cash flow growth.
Inside the Headlines
Gibraltar’s adjusted earnings per share (EPS) of $1.18 missed the Zacks Consensus Estimate of $1.26 by 6.4% but increased year over year by 2.6%.
Gibraltar Industries, Inc. Price, Consensus and EPS Surprise
Gibraltar Industries, Inc. price-consensus-eps-surprise-chart | Gibraltar Industries, Inc. Quote
Net sales of $353 million lagged the consensus mark of $370 million by 4.7% and decreased 3.3% from the prior-year level of $364.9 million due to a slowdown in the Residential market. On an adjusted basis, the top line fell 2% year over year.
Segmental Details
Renewable Energy: Net sales in the segment increased 2.5% from the year-ago quarter to $79.4 million (up 8.2% on an adjusted basis), driven by strong demand from new and existing customers for the new 1P tracker product. Despite a growing pipeline of new projects across all product lines, order backlog fell 10% as some customers paused signing new contracts as they worked through trade and/or regulatory items specific to their projects.
The adjusted operating margin of 7.8% contracted 270 basis points (bps) year over year due to an unfavorable product mix owing to the 1P tracker product moving through its launch process learning curve to permanently tooled production for suppliers and an efficient field installation process. The adjusted EBITDA margin decreased 290 bps from the prior-year quarter to 10.7%.
Residential Products: Net sales in the segment were down 6.1% year over year to $214.3 million. This was due to a slowing market and unexpected channel destocking in the second half of the quarter, partially offset by participation gains with new and existing customers, growth in ventilation product lines, and expansion initiatives in the Rocky Mountain region.
However, an adjusted operating margin of 20.3% expanded 100 bps in the quarter on the back of solid execution, 80/20 initiatives, and effective price/cost management. The adjusted EBITDA margin grew 120 bps from the prior-year quarter to 21.7%.
Agtech: Sales declined 1.4% year over year, but adjusted sales inched up 0.6% to $34.5 million. The downside was due to delayed new project construction. Backlogs increased an impressive 32% year over year on the back of solid new bookings, which reached $90 million in the quarter, representing nearly 400% growth sequentially.
The adjusted operating margin fell 290 bps year over year to 6.6%, mainly due to unfavorable project timing and mix. The adjusted EBITDA margin contracted 360 bps year over year to 9.3%.
Infrastructure: Sales in the segment rose 2.5% year over year to $24.8 million, driven by continued strong execution and market participation gains. Backlog, however, declined 12% due to a large project booked in 2023, which is reaching its final stages. On an impressive note, bookings increased 3% on a sequential basis, reflecting consistent customer activity.
The adjusted operating margin of 25.1% expanded 100 bps year over year, driven by price/cost alignment, ongoing strong execution, 80/20 productivity, and improving product mix. The adjusted EBITDA margin also expanded 70 bps from the prior-year quarter to 28.3%.
Operating Highlights
Adjusted operating income declined 4% to $47 million. The adjusted operating margin contracted 30 bps year over year to 13.4%.
Adjusted EBITDA fell 3% to $58 million in the reported period. The adjusted EBITDA margin also declined 10 bps from the prior year to 16.4%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Gibraltar had liquidity of $574 million, including cash and cash equivalents worth $179 million compared with $99.4 million at 2023-end. There was no long-term debt at the end of the second quarter.
In the first half of 2024, net cash provided by operating activities totaled $89.7 million compared with $114.1 million in the prior-year period.
2024 Guidance Updated
Gibraltar now expects net sales of $1.38-$1.42 billion versus the previous expectations of $1.43-$1.48 billion for 2024. The company reported $1.38 billion of net sales ($1.36 billion on an adjusted basis) in 2023.
GAAP EPS is still expected in the range of $4.04-$4.29 compared with $3.59 in 2023. Adjusted EPS is expected to be $4.57-$4.82 compared with $4.09 in 2023.
The company notified that Agtech bookings are up significantly and support strong revenue growth in the second half, and Infrastructure performance is expected to remain positive going forward. Also, demand and quoting remain strong within Infrastructure, and it expects order flow to increase in the second half of the year.
Zacks Rank & Peer Releases
Gibraltar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masco Corporation (MAS - Free Report) reported strong earnings for the second quarter of 2024 amid challenging market conditions. Strong operational efficiency helped it deliver solid results.
However, net sales missed the analysts’ expectations and declined on a year-over-year basis. Masco’s focus on a balanced capital deployment strategy helped it return $206 million to shareholders via dividends and share repurchases. Masco narrowed its adjusted EPS guidance while the mid-point remains unaffected.
United Rentals, Inc. (URI - Free Report) reported mixed second-quarter 2024 results. The company’s EPS surpassed the Zacks Consensus Estimate, but revenues missed the same. Nonetheless, both metrics registered improvement on a year-over-year basis.
The company showcased robust second-quarter results for 2024, achieving record highs in revenues, adjusted EBITDA, and EPS. The company's performance aligns with its expectations for the year, driven by the successful integration of Yak. This acquisition enhances URI's strategy to expand its specialty rental business, enhance its one-stop-shop offerings, and leverage opportunities for both secular growth and cross-selling. The company's unwavering commitment to safety, operational excellence, and innovation underpins its unique value proposition, positioning it for long-term shareholder value.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in the second quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate and grew year over year. The company reported better-than-expected earnings in the trailing seven quarters.
However, quarterly net sales missed the consensus mark and declined on a year-over-year basis.