Q2 Earnings Highlights: Gibraltar (NASDAQ:ROCK) Vs The Rest Of The Home Construction Materials Stocks
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As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the home construction materials industry, including Gibraltar (NASDAQ:ROCK) and its peers.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 12 home construction materials stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 22.9% below.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, home construction materials stocks have been resilient with share prices up 8.7% on average since the latest earnings results.
Gibraltar (NASDAQ:ROCK)
Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.
Gibraltar reported revenues of $353 million, down 3.3% year on year. This print fell short of analysts’ expectations by 5.5%. Overall, it was a slower quarter for the company with a miss of analysts’ earnings estimates.
“We delivered solid execution and strong operating cash flow performance across Gibraltar, generating $36 million, while overcoming two market headwinds that impacted growth in our Residential and Renewables businesses in the quarter. ” stated Chairman and CEO Bill Bosway.
Gibraltar delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 16.3% since reporting and currently trades at $67.18.
Is now the time to buy Gibraltar? Access our full analysis of the earnings results here, it’s free.