Gibraltar Industries Beats on Q4 Earnings


Gibraltar Industries, Inc. (ROCK) reported adjusted earnings per share of 8 cents in the fourth quarter of 2013, a 60% jump from the year-ago quarter as well as the Zacks Consensus Estimate of 5 cents. The increase in earnings is attributable to improved revenues and margins in the quarter.

On a GAAP basis, Gibraltar Industries reported earnings of 13 cents per share, compared with a loss of 12 cents per share in the year-ago quarter.

In 2013, the company reported adjusted earnings per share of 69 cents, up from 65 cents generated in 2012. Adjusted earnings also beat the Zacks Consensus Estimate of 66 cents.

Revenues: In the reported quarter, Gibraltar Industries’ net sales were $188.8 million, up 9.4% year over year. The year-over-year increase in revenues was primarily due to the company’s organic growth. Gibraltar Industries witnessed a rise in sales of residential new construction as well as repair and remodeling activities in the quarter. Revenues also beat the Zacks Consensus Estimate of $187.0 million.

In the quarter, the company changed its segment reporting pattern. The new segments are Industrial and Infrastructure Products and Residential Products. In the quarter, Industrial and Infrastructure Products generated $103.5 million, up 10% year over year, while Residential Products segment recorded revenues of $$85.4 million, up 9% year over year.

In 2013, Gibraltar Industries generated revenues of $827.6 million, up 4.8% year over year and marginally beating the Zacks Consensus Estimate of $826.0 million.

Costs/Margins: Gross profit margin in the quarter increased 17 basis points to 18.8%. Selling, general and administrative (SG&A) expenses for the quarter were $29.3 million, compared with $26.3 million in the year-ago quarter.

Gibraltar Industries’ adjusted operating margin of 3.6% decreased from 4.0% reported in the year-ago comparable quarter.

Balance Sheet/Cash Flow: Exiting 2013, Gibraltar Industries’ cash and cash equivalents were approximately $97.0 million, compared with $80.8 million in the previous quarter. Total long-term debt balance remained flat with the previous quarter at $213.6 million.

For 2013, Gibraltar Industries generated cash from operations of $60.3 million, against $50.1 million in 2012. Capital expenditure incurred in 2013 totaled $14.9 million versus $11.4 million in the year-ago comparable period.

Outlook: In the coming quarters, the company expects to leverage the improvement in its end markets. Gibraltar Industries is also focused on reducing its costs, thereby improving margins. Based on this, management projects sales growth in the range of 4% to 7% in 2014 with modest  margin growth, compared with 2013. Adjusted earnings per share are expected in the range of 76 to 90 cents in 2014.

However, slowing residential construction activities and weakness in the industrial and transportation infrastructure markets is expected to hamper the first-quarter 2014 results.

Other Stocks to Consider

Gibraltar Industries currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks worth considering in the machinery industry are CaesarStone Sdot-Yam Ltd. (CSTE), USG Corporation (USG) and AK Steel Holding Corporation (AKS). While CaesarStone sports a Zacks Rank #1 (Strong Buy), USG Corp. and AK Steel Holding Corp. hold a Zacks Rank #2 (Buy).

Read the Full Research Report on AKS
Read the Full Research Report on ROCK
Read the Full Research Report on USG
Read the Full Research Report on CSTE

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