Eagle Materials Inc (EXP) Reports Record Second Quarter Results with 15% EPS Growth
Eagle Materials Inc (NYSE:EXP) reported record revenue of $622 million and record EPS of $4.26 for Q2 2024.
EXP's net debt was $1.1 billion, with a net adjusted leverage ratio of 1.3x.
Heavy Materials sector revenue increased by 10% to $426.9 million, while Light Materials sector revenue decreased by 8% to $233.5 million.
EXP returned $86 million of cash to shareholders through share repurchases and dividends.
On October 26, 2023, Eagle Materials Inc (NYSE:EXP) released its financial results for the second quarter of fiscal 2024. The company reported record revenue of $622 million and record EPS of $4.26, marking a 15% growth in EPS. This strong performance was attributed to resilient market conditions for construction materials, despite the Federal Reserve's continued interest rate hikes.
Financial Highlights
EXP's gross margins expanded by 150 basis points to 33.6%. The company generated a cash flow from operations of $172.4 million. In a bid to return value to shareholders, EXP repurchased shares and paid dividends amounting to $86 million. The company's net debt stood at $1.1 billion, with a net adjusted leverage ratio of 1.3x.
Segment Performance
The Heavy Materials sector, which includes Cement, Concrete and Aggregates, reported a 10% increase in revenue to $426.9 million. Operating earnings for this sector were up 19% to $126.1 million. The Light Materials sector, including Gypsum Wallboard and Paperboard, saw an 8% decrease in revenue to $233.5 million.
CEO Commentary
Market conditions for our construction materials remained resilient during the quarter, even as the Fed continued to raise interest rates and tighten money supply to contain inflation. Several factors helped offset the higher rates and supported demand for wallboard and cement, including limited housing supply, strong homebuyer demand, increasing infrastructure awards and significant investment in domestic manufacturing facilities. Against this backdrop, our businesses performed well." - Michael Haack, President and CEO
Looking Forward
Despite the potential impact of rising interest rates on residential construction activity, EXP expects its portfolio of businesses to remain well-positioned for the second half of fiscal 2024.
About Eagle Materials Inc (NYSE:EXP)
Eagle Materials Inc manufactures and distributes Portland Cement, Gypsum Wallboard, Recycled Paperboard and Concrete and Aggregates from more than 70 facilities across the US. The company's corporate headquarters is in Dallas, Texas.
Explore the complete 8-K earnings release (here) from Eagle Materials Inc for further details.
This article first appeared on GuruFocus.
