A month has passed by because the final earnings report for UFP Industries (UFPI). Shares have added about 11.8% in that timeframe, outperforming the S&P 500.
Will the latest constructive development proceed main as much as its subsequent earnings launch, or is UFP Industries due for a pullback? Earlier than we dive into how traders and analysts have reacted as of late, let’s take a fast take a look at its most up-to-date earnings report so as to get a greater deal with on the necessary drivers.
UFP Industries Q3 Earnings & Gross sales Miss Estimates, Decline Y/Y
UFP Industries reported tepid outcomes for the third quarter of 2024. Earnings and web gross sales each missed the Zacks Consensus Estimate and declined 12 months over 12 months.
The quarterly outcomes have been affected by softer demand and broad-based pricing pressures. The corporate is going through hassle managing the continued macroeconomic challenges, aligning its overhead with decrease demand ranges and eliminating pointless prices. Though it’s endeavor strategic initiatives and banking on potential alternatives, the continued dangers are anticipated to proceed to influence the monetary outcomes because it strikes into 2025.
Nonetheless, the corporate goals to acquire extra applicable pricing on strategic acquisitions, put money into new merchandise, automation and know-how and pursue natural enlargement.
UFPI’s Earnings & Income Dialogue
UFP Industries reported earnings per share (EPS) of $1.64, which missed the Zacks Consensus Estimate of $1.81 by 9.4% and declined 21.9%% from the year-ago quarter.
Web gross sales of $1.65 billion additionally lagged the consensus mark of $1.78 billion by 7.2% and declined 10% 12 months over 12 months. The draw back was primarily because of a 7% fall in promoting costs and a 3% decline in natural unit gross sales. New product gross sales of $119 million contributed 7.2% to complete web gross sales in contrast with 7.6% within the prior-year quarter.
Segmental Dialogue of UFPI
UFP Retail Options: The section reported web gross sales of $636 million, which declined 13% 12 months over 12 months because of a 7% decline in promoting costs and 4% decrease natural unit gross sales. Additionally, a 2% discount because of the switch of sure product gross sales to the Packaging and Development segments. Adjusted EBITDA margin rose 40 bps from the prior 12 months to eight%.
UFP Packaging: The section’s web gross sales totaled $402 million, down 11% from the year-ago interval’s stage. Promoting costs declined 8% and natural unit gross sales have been down 5% 12 months over 12 months. This was partially balanced by a 2 p.c improve from the switch of sure product gross sales from the Retail section. Adjusted EBITDA margin contracted 330 bps from the prior 12 months to eight.6%.
UFP Development: Web gross sales within the section have been $535 million, which declined 8% from the year-ago interval. The downturn was because of a 7% lower in promoting costs and a 2% decline in natural unit gross sales. This was partially offset by a 1% improve from the switch of sure product gross sales from the Retail section. Adjusted EBITDA margin contracted 370 bps from the prior 12 months to 9.5%.
UFPI’s Working Highlights
Promoting, common and administrative bills — accounting for 11.1% of web gross sales — elevated 40 bps 12 months over 12 months.
Adjusted EBITDA of $164.9 million declined 12 months over 12 months from $207.8 million. Adjusted EBITDA margin additionally contracted 140 bps from the prior 12 months to 10%.
Stability Sheet & Money Move of UFPI
As of Sept. 28, 2024, the corporate had almost $2.4 billion in liquidity. Money and money equivalents have been $1.19 billion on the third-quarter finish in contrast with $1.1 billion on the finish of 2023. Lengthy-term debt and finance lease obligations have been $232 million, down from $274.8 million at 2023-end. Web money from working actions was $497.7 million on the third-quarter finish in contrast with $711.8 million within the year-ago interval.
On Oct. 23, 2024, the board of administrators accredited a quarterly dividend fee of 33 cents per share, a ten% improve from the quarterly dividend of 30 cents per share. The dividend is payable on Dec. 16, 2024, to shareholders of report on Dec. 2.
On July 24, 2024, the board of administrators approved the corporate to repurchase as much as $200 million of shares by way of July 31, 2025. No shares have been repurchased underneath this new authorization.
UFPI’s Outlook
UFP Industries continues to count on lumber costs to stay decrease in 2024, because of current provide and demand dynamics.
For the fourth quarter of 2024, the corporate continues to anticipate demand to lower in Retail by mid-single digits and whereas Packaging demand is anticipated to be down by mid- to high-single digits. It now anticipates a lower in demand for Development by low-single digit.
General, the corporate expects softer demand and the aggressive pricing surroundings to proceed by way of the rest of 2024 and into 2025, leading to tougher year-over-year unit gross sales and profitability comparisons, partially offset by market share positive factors in every of its segments.
How Have Estimates Been Shifting Since Then?
It seems, estimates evaluate have trended downward in the course of the previous month.
The consensus estimate has shifted -16.33% because of these modifications.
VGM Scores
Right now, UFP Industries has a pleasant Progress Rating of B, although it’s lagging so much on the Momentum Rating entrance with an F. Nevertheless, the inventory was allotted a grade of B on the worth facet, placing it within the high 40% for this funding technique.
General, the inventory has an combination VGM Rating of B. In the event you aren’t targeted on one technique, this rating is the one you have to be inquisitive about.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions signifies a downward shift. It is no shock UFP Industries has a Zacks Rank #4 (Promote). We count on a under common return from the inventory within the subsequent few months.
Efficiency of an Business Participant
UFP Industries is a part of the Zacks Constructing Merchandise – Wooden business. Over the previous month, Weyerhaeuser (WY), a inventory from the identical business, has gained 3.3%. The corporate reported its outcomes for the quarter ended September 2024 greater than a month in the past.
Weyerhaeuser reported revenues of $1.68 billion within the final reported quarter, representing a year-over-year change of -16.9%. EPS of $0.05 for a similar interval compares with $0.33 a 12 months in the past.
For the present quarter, Weyerhaeuser is anticipated to submit earnings of $0.05 per share, indicating a change of -68.8% from the year-ago quarter. The Zacks Consensus Estimate has modified -17.4% during the last 30 days.
The general path and magnitude of estimate revisions translate right into a Zacks Rank #4 (Promote) for Weyerhaeuser. Additionally, the inventory has a VGM Rating of F.
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UFP Industries, Inc. (UFPI) : Free Stock Analysis Report
Weyerhaeuser Company (WY) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
