Latest news with #WillSchwartz
Yahoo
29-04-2025
- Business
- Yahoo
UFP Industries (NASDAQ:UFPI) Reports Sales Below Analyst Estimates In Q1 Earnings
Building materials manufacturer UFP Industries (NASDAQ:UFPI) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 2.7% year on year to $1.60 billion. Its GAAP profit of $1.30 per share was 16.9% below analysts' consensus estimates. Is now the time to buy UFP Industries? Find out in our full research report. Revenue: $1.60 billion vs analyst estimates of $1.63 billion (2.7% year-on-year decline, 1.9% miss) EPS (GAAP): $1.30 vs analyst expectations of $1.57 (16.9% miss) Adjusted EBITDA: $142.2 million vs analyst estimates of $159.3 million (8.9% margin, 10.8% miss) Operating Margin: 5.8%, down from 8.2% in the same quarter last year Free Cash Flow was -$176.1 million compared to -$89.69 million in the same quarter last year Market Capitalization: $6.49 billion 'While our first quarter proved more challenging than anticipated and visibility remains limited, we are more encouraged by recent business trends,' said Will Schwartz, UFP Industries CEO. Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors. A company's long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, UFP Industries's 8.3% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. UFP Industries's recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 14.1% over the last two years. UFP Industries isn't alone in its struggles as the Building Materials industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. This quarter, UFP Industries missed Wall Street's estimates and reported a rather uninspiring 2.7% year-on-year revenue decline, generating $1.60 billion of revenue. Looking ahead, sell-side analysts expect revenue to grow 5.1% over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. UFP Industries has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.5%, higher than the broader industrials sector. Analyzing the trend in its profitability, UFP Industries's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. This quarter, UFP Industries generated an operating profit margin of 5.8%, down 2.4 percentage points year on year. Since UFP Industries's gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. UFP Industries's EPS grew at a spectacular 15.3% compounded annual growth rate over the last five years, higher than its 8.3% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn't expand and it didn't repurchase its shares, meaning the delta came from reduced interest expenses or taxes. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. UFP Industries's two-year annual EPS declines of 21.8% were bad and lower than its two-year revenue performance. In Q1, UFP Industries reported EPS at $1.30, down from $1.96 in the same quarter last year. This print missed analysts' estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects UFP Industries's full-year EPS of $6.15 to grow 16.7%. We struggled to find many positives in these results as its revenue, EPS, and EBITDA fell short of Wall Street's estimates. Overall, this was a weaker quarter. The stock traded down 2.3% to $104 immediately after reporting. UFP Industries's latest earnings report disappointed. One quarter doesn't define a company's quality, so let's explore whether the stock is a buy at the current price. If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
19-02-2025
- Business
- Yahoo
UFP Industries Inc (UFPI) Q4 2024 Earnings Call Highlights: Strategic Investments Amid ...
Release Date: February 18, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. UFP Industries Inc (NASDAQ:UFPI) ended 2024 with strong liquidity, boasting nearly $1.2 billion in cash and an equivalent amount of debt capacity. The company achieved a 10.3% EBITA margin for the year, which is 300 basis points higher than 2019 levels. UFPI's acquisition of CNL Wood Products expands its geographic reach and strengthens its packaging segment. The company is investing heavily in automation, technology, and new product development to enhance shareholder value. UFPI's new product sales for 2024 reached $505 million, with a goal to increase new products to 10% of sales over time. UFPI experienced a 4% decline in sales for the quarter, driven by a reduction in selling prices due to weaker demand. The company's adjusted EBITA fell by 28% to $133 million, with margins pressured by competitive pricing. UFPI's packaging segment saw a 9% drop in sales, with a significant decline in structural packaging volume. The construction segment faced a 5% decrease in sales, with a notable decline in site-built unit volumes. UFPI anticipates challenging business conditions to persist into the first half of 2025, with modest unit declines expected across business units. Warning! GuruFocus has detected 7 Warning Signs with TMNSF. Q: Can you provide an update on the decorators' shelf space changes at big box retailers and the expected impact on growth in 2025? A: We are excited about the Surestone technology, which will be placed in a big way in over 1,500 stores in the second half of the year. We are building capacities through CapEx investments, and you will see this come into play significantly in the latter half of the year. (Will Schwartz, CEO) Q: Regarding construction gross margins, how much of the pressure is due to mix versus pricing declines? A: The pricing declines within site build were significant and are expected to continue into the first half of the year. The mix impact is also significant, as factory-built carries a different margin structure than site build, which is our highest margin business. We expect this mix impact to continue into the first half of the year. (Mike Cole, CFO) Q: What trends are you seeing in the packaging segment from a demand and pricing standpoint? A: There continues to be pressure with market takeaway down, and we expect this to persist for at least the first half of the year. We believe pricing has reached a bottom, but we do not expect increases until demand improves. (Will Schwartz, CEO) Q: Can you remind us about the CapEx program and how much has been spent so far? A: The $1 billion program is largely intact. Last year, we approved $330 million, but the spend was lower due to long lead times for equipment and site selection for greenfields. We expect to approve another $350 million this year, focusing on high-margin businesses. (Mike Cole, CFO) Q: Are there any material changes to your capital expenditure strategy in the near or long term? A: We remain committed to deploying capital for growth, with a focus on expanding existing facilities, greenfield growth, and efficiency through automation. The commitment to 250 to 300 million annually remains strong, with potential pivots to M&A if opportunities arise. (Mike Cole, CFO) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
