Construction Partners (ROAD) Q4 Earnings & Revenues Top, Up Y/Y
Construction Partners, Inc. ROAD reported impressive fourth-quarter fiscal 2023 results, wherein earnings and revenues topped the Zacks Consensus Estimate and increased on a year-over-year basis.
The company’s result was driven by increased public infrastructure demand thanks to the IIJA and state funding programs, accompanied by a sustained strong commercial market throughout its six southeastern states. Also, a stabilized cost environment on the back of a normalizing operating environment added to the growth trend. The company expects the stable cost environment to continue in fiscal 2024 as well.
Furthermore, Construction Partners remains focused on implementing the strategic initiatives outlined in its ROAD-Map 2027 throughout is geographical footprint along with building shareholder value.
Following the results, shares of this vertically integrated civil infrastructure company declined 1.3% during the trading hours but gained 1.7% in the after-hours trading session on Nov 29.
Inside the Headlines
In the fiscal fourth quarter of 2023, Construction Partners reported earnings of 59 cents per share, which topped the Zacks Consensus Estimate of earnings of 52 cents per share by 13.5%. The metric also grew by a whopping 136% year over year.
Quarterly revenues of $475 million surpassed the consensus mark of $464.3 million by 2.3% and grew 20.8% year over year.
Construction Partners, Inc. Price, Consensus and EPS Surprise
Construction Partners, Inc. price-consensus-eps-surprise-chart | Construction Partners, Inc. Quote
Adjusted EBITDA surged 76% from the prior-year quarter’s figure to $69.3 million. Adjusted EBITDA margin rose 460 basis points (bps) from the prior-year quarter to 14.6%. The project backlog at the end of fiscal 2023 amounted to $1.6 billion, up 13.5% from the year-ago period.
Operating Highlights
During the quarter, the company’s operating income of $44.8 million was up from the prior-year quarter’s level of $20.4 million.
Operating margin expanded 420 bps to 9.4% from the prior-year quarter’s reported value of 5.2%.
Fiscal 2023 at a Glance
Total revenues of $1.56 billion grew 20.1% year over year. The upside was attributable to acquisitions completed during or subsequent to fiscal 2022, contract work and sales of HMA and aggregates to third parties along with strong demand in both public and private work.
Earnings per share were 94 cents, a hike of 129.3% from fiscal 2022. Adjusted EBITDA grew 56.6% to $174.1 billion and adjusted EBITDA margin increased 260 bps to 11.1% year over year.
Financials
As of Sep 30, 2023, ROAD had cash and cash equivalents of $48.2 million compared with $35.5 million at fiscal 2022 end. Net cash provided by operating activities was $157.2 million in fiscal 2023 compared with $16.5 million in the year-ago period.
Fiscal 2024 Guidance
For fiscal 2024, Construction Partners expects revenues to be in the range of $1.75 billion and $1.83 billion.
For the fiscal year, the company anticipates adjusted EBITDA to be in the range of $197 million-$219 million and the adjusted EBITDA margin to be between 11.3% and 12.0%.
Zacks Rank & Other Key Picks
Construction Partners currently sports a Zacks Rank #1 (Strong Buy).
Here are some other top-ranked stocks that investors may consider from the Construction sector.
Acuity Brands, Inc. AYI currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AYI delivered a trailing four-quarter earnings surprise of 12%, on average. The stock has declined 6% in the past year. The Zacks Consensus Estimate for AYI’s fiscal 2024 sales and earnings per share (EPS) indicates a decline of 3% and 4.7%, respectively, from a year ago.
M-tron Industries, Inc. MPTI currently sports a Zacks Rank of 1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average. It has surged 233.6% in the past year.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year.
EMCOR Group, Inc. EME presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 25%, on average. Shares of EME have increased 37.2% in the past year.
The Zacks Consensus Estimate for EME’s 2023 sales and EPS indicates an improvement of 12% and 52.8%, respectively, from the prior-year levels.
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