ROCK Lowers 2024 Sales & EPS Views, Provides Q3 Preliminary Results
Gibraltar Industries, Inc. ROCK recently announced the revision of its 2024 net sales and earnings per share (EPS) guidance.
The revision showcases a downgrade from its previously stated guidance primarily due to the ongoing softness in the housing market and risks encompassing the solar industry.
ROCK’s Revised 2024 Guidance
During the second quarter of 2024 earnings, the company lowered its net sales expectations, for the year, to the range of $1.38-$1.42 billion compared with the previous expectations of $1.43-$1.48 billion. However, given the headwinds mentioned above, Gibraltar further lowered its expected net sales range to between $1.31 billion and $1.33 billion. This compares with 2023 reported net sales of $1.38 billion and adjusted net sales of $1.36 billion.
Apart from the top line, ROCK also lowered its GAAP and adjusted EPS estimated ranges for 2024. The company now expects GAAP EPS to be between $3.57 and $3.71 (the priorly expected range was $4.04-$4.29), which compares with the year-over-year reported value of $3.59. Furthermore, adjusted EPS is now expected to be between $4.11 and $4.25 (the previously expected range was $4.57-$4.82) compared with $4.09 reported a year ago.
Gibraltar also highlighted its preliminary third-quarter 2024 net sales and EPS results, which are subject to change based on its financial and operating closing procedures, customary review procedures and other developments before the completion of these procedures. For the three months ended Sept. 30, 2024, the company expects net sales and adjusted net sales to be in the range of $359-$362 million year over year, down from reported net sales and adjusted sales of $390.7 million and $385.2 million, respectively. GAAP EPS and adjusted EPS are expected to be in the ranges of $1.09-$1.12 and $1.25-$1.28, respectively, compared with the prior year’s reported values of $1.28 and $1.37.
Factors Highlighted by Gibraltar for Guidance Revision
Gibraltar has undergone such a move regarding its 2024 results because of the underlying ongoing risks in the solar industry and softness in the residential market.
The company stated that the solar industry is currently dealing with trade and regulatory uncertainties driven by the impact of the two independent antidumping and countervailing duty (AD/CVD) investigations. The expiration of tariff moratorium on panels associated with the first investigation is expiring on Dec. 3, 2024, and the second investigation is scheduled to be finalized in the first quarter of 2025.
Additionally, the housing market is moving slower than expected, including the repair and remodel sector. This is likely due to the longer-than-expected time taken for customers to exhaust the existing inventory from the obligated suppliers.
These discussed factors have been specifically highlighted by the company and are the primary reasons for it to lower its 2024 guidance. It expects the solar industry to ramp up in the first half of 2025, post the closure of the two AD/CVD investigations.
ROCK Stock’s Price Performance
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ROCK stock has lost 8.8% in the past three months against the Zacks Building Products – Miscellaneous industry’s 9% growth. The slower market conditions in Residential and Renewables end markets have been marring the prospects of the company in the near term. This, alongside solar industry headwinds, is likely to hinder its growth trend for some time, with the expectation of recovery from the former half of 2025.
ROCK’s Zacks Rank & Key Picks
Gibraltar currently carries a Zacks Rank #3 (Hold).
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The AZEK Company Inc. AZEK currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AZEK delivered a trailing four-quarter earnings surprise of 34.2%, on average. The stock has gained 59.1% in the past year. The Zacks Consensus Estimate for AZEK’s fiscal 2025 sales and EPS indicates growth of 7.6% and 18.9%, respectively, from the prior-year levels.
LSI Industries Inc. LYTS presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 54.1%, on average. Shares of LYTS have rallied 1.4% in the past year.
The consensus estimate for LYTS’ fiscal 2025 sales and EPS implies an increase of 14.5% and 6%, respectively, from the prior-year levels.
KBR, Inc. KBR currently carries a Zacks Rank #2 (Buy). KBR delivered a trailing four-quarter earnings surprise of 4.8%, on average. The stock has increased 13.6% in the past year.
The Zacks Consensus Estimate for KBR’s 2024 sales and EPS indicates an increase of 9.4% and 11.7%, respectively, from a year ago.
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