Gibraltar Industries, Inc. ROCK reported mixed third-quarter 2024 results. Earnings beat the Zacks Consensus Estimate, but revenues missed the same.

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Shares of ROCK have gained 4.7% during the trading session on Oct. 30, 2024.

Gibraltar’s third-quarter performance was aligned with forecasts, with Renewables and Residential segments meeting expectations and Agtech sales rising more than 30%. Improved margins across three of four segments generated $65 million in cash flow, supported by strong execution and effective working capital management. CEO Bill Bosway emphasized that despite challenging market conditions, Gibraltar remains positioned for earnings growth this year. The company continues to focus on operational improvements and expanding customer relationships to navigate current market dynamics.

Gibraltar Industries, Inc. Price, Consensus and EPS Surprise

Gibraltar Industries, Inc. price-consensus-eps-surprise-chart | Gibraltar Industries, Inc. Quote

Inside ROCK’s Headlines

Gibraltar’s adjusted earnings per share (EPS) of $1.27 beat the Zacks Consensus Estimate of $1.26 but decreased by 7.3% year over year.

Net sales of $361.2 million lagged the consensus mark of $362 million and decreased 7.6% from the prior-year level of $390.7 million due to challenges in the solar industry affecting the Renewables segment and a slowdown in the Residential market, with some offset from growth in Agtech. On an adjusted basis, the top line fell 6.2% year over year.

ROCK’s Segmental Details

Renewable Energy: Net sales in the segment dropped 21% from the year-ago quarter to $84.1 million (down 17.2% on an adjusted basis). Net sales and new project bookings were affected by trade and regulatory challenges from two AD/CVD investigations, as the industry focuses on panel installations and reporting requirements before the Dec. 3, 2024, tariff moratorium expiration. The backlog declined by 24%.

The adjusted operating margin of 6.5% contracted 1,040 basis points (bps) year over year due to an unfavorable product mix. The adjusted EBITDA margin decreased from 19% in the prior-year quarter to 9.3%.

Residential Products: Net sales in the segment were down 6.7% year over year to $212.4 million due to a sluggish residential market, particularly in the repair and remodel sector.

However, an adjusted operating margin of 19.9% expanded 110 bps in the quarter due to solid execution, 80/20 initiatives and effective price/cost management. The adjusted EBITDA margin expanded from 20.2% from the prior-year quarter to 21.4%.

Agtech: Sales grew 30.9% year over year, and adjusted sales rose 34.3% to $41.5 million. The upside was driven by accelerating projects in the Produce division, including facilities for growing strawberries, lettuce, melons and vine crops.

The adjusted operating margin expanded 450 bps year over year to 10.1% due to volume, product mix, 80/20 initiatives and solid field execution. The adjusted EBITDA margin expanded from 8.1% a year ago to 12.2%.

Infrastructure: Sales in the segment dropped 7.2% year over year to $23.2 million, impacted by the timing of a large project in the prior year. However, the backlog grew 3%, with strong demand and quoting activity driven by continued federal and state investment.

The adjusted operating margin of 27.9% expanded 230 bps year over year, fueled by a favorable product mix, the launch of new products, the impact of 80/20 initiatives and effective execution. The adjusted EBITDA margin expanded from 29.1% in the prior-year quarter to 31.4%.

Gibraltar’s Operating Highlights

Adjusted operating income declined 13.6% to $50.1 million. The adjusted operating margin contracted 120 bps year over year to 13.9%.

Adjusted EBITDA fell 11.7% to $66.8 million in the reported period. The adjusted EBITDA margin was 16.3%, down from 17.3% a year ago.

ROCK’s Balance Sheet & Cash Flow

As of Sept. 30, 2024, Gibraltar had cash and cash equivalents of $228.9 million compared with $99.4 million at 2023-end. There was no long-term debt at the end of the third quarter.

In the first nine months of 2024, net cash provided by operating activities totaled $154.3 million compared with $206.7 million in the prior-year period.

Gibraltar’s 2024 Guidance

Gibraltar expects net sales in the band of $1.31-$1.33 billion. The company reported $1.38 billion of net sales ($1.36 billion on an adjusted basis) in 2023.

GAAP EPS is expected in the range of $3.57-$3.71 compared with $3.59 in 2023. Adjusted EPS is expected in the band of $4.11-$4.25 compared with $4.09 in 2023.

ROCK’s Zacks Rank & Peer Releases

Gibraltar currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Otis Worldwide Corporation OTIS reported dismal results in the third quarter of 2024, with adjusted earnings and net sales missing the Zacks Consensus Estimate.

Otis reported lower-than-expected earnings in the quarter after four consecutive quarters of earnings beat. The top and bottom lines increased on a year-over-year basis.

Masco Corporation MAS reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.

Masco lowered the upper limit of its 2024 adjusted earnings per share (EPS) guidance due to challenged market demand.

Armstrong World Industries, Inc. AWI reported solid results for the third quarter of 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.

Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted earnings per share and adjusted free cash flow.

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