Q2 Earnings Outperformers: Quanex (NYSE:NX) And The Rest Of The Home Construction Materials Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at home construction materials stocks, starting with Quanex (NYSE:NX).
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 slower Q2. As a group, revenues missed analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 22.9% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data, and while some home construction materials stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.5% since the latest earnings results.
Quanex (NYSE:NX)
Starting in the seamless tube industry, Quanex (NYSE:NX) manufactures building products like window, door, kitchen, and bath cabinet components.
Quanex reported revenues of $280.3 million, down 6.4% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ Cabinet Components revenue estimates and a decent beat of analysts’ operating margin estimates.
George Wilson, Chairman, President and Chief Executive Officer, stated, “Overall, the results we reported for the third quarter of 2024 were consistent with our expectations. Consistent with the seasonality of our business, volumes increased across all operating segments in the third quarter of this year when compared to the second quarter."
Quanex Total Revenue
Quanex achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 5.3% since reporting and currently trades at $26.17.
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $986 million, down 12.4% year on year, falling short of analysts’ expectations by 1.4%. However, the business still had a very strong quarter with an impressive beat of analysts’ organic revenue and earnings estimates.
JELD-WEN Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.2% since reporting. It currently trades at $13.62.
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, falling short of analysts’ expectations by 5.5%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates and full-year revenue guidance missing analysts’ expectations.
As expected, the stock is down 19.2% since the results and currently trades at $64.84.
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $2.09 billion, down 1.7% year on year. This print was in line with analysts’ expectations. More broadly, it was a strong quarter as it also recorded a decent beat of analysts’ operating margin estimates but a miss of analysts’ organic revenue estimates.
The stock is up 11% since reporting and currently trades at $78.33.
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $647.8 million, down 5.2% year on year. This print came in 6% below analysts' expectations. More broadly, it was a strong quarter as it also produced optimistic EBITDA guidance for the full year but full-year revenue guidance missing analysts’ expectations.
Griffon had the weakest performance against analyst estimates among its peers. The stock is down 9.6% since reporting and currently trades at $62.83.
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