Gibraltar Industries Beats on Earnings, Lags Revs

Zacks

Gibraltar Industries, Inc. (ROCK) reported adjusted earnings per share of 31 cents in the third quarter of 2013, up 29.2% from 24 cents in the year-ago quarter. It also surpassed the Zacks Consensus Estimate of 25 cents by 24.0%. The increase in earnings is attributable to improved revenues in the quarter.

On a GAAP basis, Gibraltar Industries reported a loss of 44 cents per share, compared with earnings of 23 cents per share in the year-ago quarter.

Revenues: In the reported quarter, Gibraltar Industries’ net sales were $217.4 million, up 5.8% year over year. The year-over-year increase in revenues was primarily due to accretive acquisitions and improvement in the residential new construction market. However, revenues missed the Zacks Consensus Estimate of $225.0 million.

In the third quarter, Gibraltar Industries experienced a negative trend in the industrial and infrastructure markets, which led to a year-over-year decline in the organic sales.  

Costs/Margins: Adjusted gross profit margin in the quarter increased 16 basis points to 19.9%. Adjusted selling, general and administrative (SG&A) expenses for the quarter were $24.7 million, compared with $24.3 million in the year-ago comparable quarter.

Gibraltar Industries’ adjusted operating margin of 8.5% increased from 7.9% reported in the year-ago comparable quarter.

Balance Sheet/Cash Flow: Exiting the third quarter of 2013, Gibraltar Industries’ cash and cash equivalents were approximately $80.8 million, compared with $44.6 million in the previous quarter. Total long-term debt balance remained flat with the previous quarter at $213.6 million.

For the nine months ended Sep 30, 2013, Gibraltar Industries generated cash from operations of $37.9 million, against $26.7 million in the nine months ended Sep 30, 2012. Capital expenditure incurred in the first nine months of 2013 totaled $8.8 million versus $6.9 million in the year-ago comparable period.

Outlook: In the coming quarters, the company expects its acquired businesses to contribute significantly to revenues. Based on this, management projects sales growth of 4.5% in 2013 with margins roughly flat, compared with 2012. Adjusted earnings per share are expected in the range of 63 cents to 66 cents in 2013.

In 2014, Gibraltar Industries anticipates a rise in demand for building products, which is expected to boost the revenues.

Other Stocks to Consider

Gibraltar Industries currently carries a Zacks Rank #3 (Hold). Other stocks worth considering in the machinery industry are Gerdau S.A. (GGB), Masco Corp. (MAS) and Trex Co. Inc. (TREX). All of these carry a Zacks Rank #2 (Buy).

Read the Full Research Report on ROCK
Read the Full Research Report on MAS
Read the Full Research Report on GGB
Read the Full Research Report on TREX


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