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Gibraltar Industries Beats Q2 Earnings Estimates; Falls Y/Y

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Gibraltar Industries, Inc. (ROCK) reported adjusted earnings of 19 cents per share in the second quarter of 2014, down compared with 26 cents earned in the year-ago quarter. However, the top-line result surpassed the Zacks Consensus Estimate of 15 cents.

On a GAAP basis, Gibraltar Industries reported earnings of 21 cents per share, compared with 25 cents in the prior-year quarter.

Gibraltar Industries, Inc - Earnings Surprise | FindTheBest

Revenues: Gibraltar Industries’ net sales were $235.0 million in the quarter, up 4.7% year over year. The increase in revenues was primarily driven by strong growth in the centralized postal storage solutions business and increased volumes in the industrial markets. This was however, partially offset by a reduced demand for the roofing-related products. Nevertheless, revenues beat the Zacks Consensus Estimate of $231.0 million.

Industrial and Infrastructure Products generated $117.9 million, up 2.9% year over year, while Residential Products segment recorded revenues of $117.4 million, up 6.3% year over year.

Costs/Margins: Gross profit margin decreased 280 basis points to 17.1%. Selling, general and administrative (SG&A) expenses were $25.4 million, compared with $28.4 million recorded in the prior-year quarter.

Gibraltar Industries reported adjusted operating margin of 6.0%, down from 7.6% in the year-ago quarter.

Balance Sheet/Cash Flow: Exiting second-quarter 2014, Gibraltar Industries’ cash and cash equivalents were approximately $87.8 million, versus $78.2 million in the preceding quarter. Total long-term debt balance remained roughly flat with the previous quarter at $213.2 million.

In the six months ended Jun 30, 2014, Gibraltar Industries used $3.8 million of cash in operating activities, against $5.3 million generated in the year-ago comparable period. Capital expenditure incurred totaled $11.5 million versus $4.7 million in the six months ended Jun 30, 2013.

Outlook: The company believes that the market conditions will remain unchanged in the next half of the current year. Moreover, margin-management initiatives are expected to improve adjusted earnings in the coming half year.

Based on this, management anticipates full-year 2014 revenues in the range of $853 to $860 million, compared with $828 million in 2013. For the third quarter of 2014, adjusted earnings per share are expected in the range of 23 to 27 cents compared with 31 cents earned in the prior-year comparable period. Further, for 2014, management expects adjusted earnings per share within 50 to 55 cents compared with 69 cents in 2013. On a GAAP-basis, earnings per share in 2014 are expected to come within 45 to 50 cents compared with a loss of 18 cents per share in 2013.

Other Stocks to Consider

Gibraltar Industries currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the machinery industry include Grupo Simec S.A.B. de C.V. (SIM), PGT, Inc. (PGTI) and Quanex Building Products Corporation (NX). While Grupo Simec sports a Zacks Rank #1 (Strong Buy), PGT, Inc. and Quanex Building Products hold a Zacks Rank #2 (Buy).

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