Boise Cascade Company BCC reported tepid third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and declining year over year. Although quarterly sales marginally topped the consensus mark, it declined year over year.
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The company's quarterly performance was marred by softer sales volume and lower sales prices across the products it manufactures and distributes. The downtrend in volumes can be attributed to the soft single-family residential demand, which is the key driver of BCC’s sales.
The slow demand environment is likely to take a toll on the company’s prospects, with seasonality during the winter months being around the corner. However, the optimism regarding the Fed reducing interest rates and its key strategic investment initiatives are expected to foster growth in the upcoming period. Also, it aims to allocate its capital and ensure shareholders’ value, besides focusing on business growth.
Detailed Discussion of BCC
Boise Cascade reported adjusted earnings per share (EPS) of $2.33, which missed the Zacks Consensus Estimate of $2.37 by 1.7%. In the year-ago quarter, the company reported an adjusted EPS of $3.58.
Quarterly sales of $1.714 billion topped the consensus mark of $1.711 million by 0.2% but dropped 7% year over year.
Boise Cascade, L.L.C. Price, Consensus and EPS Surprise
Boise Cascade, L.L.C. Price, Consensus and EPS Surprise
Adjusted EBITDA of $154.5 million was down 29% from the prior-year quarter.
Boise Cascade’s Segmental Analysis
Wood Products: The segment’s sales (including sales to the BMD segment) of $453.9 million were down 12% from the prior-year period’s level. The downside in sales was due to lower plywood sales prices, reduced LVL and I-joist prices (collectively referred to as EWP) and a drop in lumber and residual byproducts sales.
Adjusted EBITDA was $77.4 million, down 37% from $122.9 million reported a year ago.
During the quarter, the segment’s costs and expenses — as a percentage of segment sales — increased year over year to 88.1% from 80.7%. The increase in materials, labor and other operating expenses contributed to the uptick.
Building Materials Distribution or BMD: Sales in the segment plunged 6% year over year to $1.57 billion, primarily due to a sales price decrease of 6%, as sales volumes remained flat year over year.
The segment’s adjusted EBITDA fell 16% year over year to $87.7 million from $104.9 million.
The segment’s costs and expenses — as a percentage of segment sales — increased year over year to 95.2% from 94.2%. The increase in selling and distribution expenses, along with depreciation and amortization, caused the uptick.
BCC’s Financials
The total liquidity of Boise Cascade, as of Sept. 30, 2024, was $1.157 billion, down from $1.35 billion reported at the end of Dec. 31, 2023. Total liquidity includes $395.7 million of undrawn committed bank line availability and cash and cash equivalents. At the third-quarter end, the company had cash and cash equivalents of $761.6 million, down from $949.6 million at 2023-end.
Long-term debt was $445.9 million, marginally up from $445.3 million reported in 2023-end.
As of the nine months ended on Sept. 30, 2024, net cash provided by operations was $343.8 million, down from $521.1 million in the year-ago period.
During the first nine months of 2024, the company repurchased 1,232,345 shares of its common stock for a total value of $158.5 million.
BCC’s Zacks Rank & Recent Construction Releases
Boise Cascade currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quanta Services Inc. PWR reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Quanta reported a strong quarter with double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.
EMCOR Group, Inc. EME reported impressive third-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing year over year.
The upside was backed by innovation and high-demand projects, particularly in data centers, semiconductor plants, and institutional sectors. Strength across the segments helped the company achieve 12.6% higher organic revenues. The company now expects annual revenues of at least $14.5 billion compared with $14.5-$15 billion expected earlier.
Otis Worldwide Corporation OTIS reported dismal results in the third quarter of 2024, with adjusted earnings and net sales missing the Zacks Consensus Estimate. The company reported lower-than-expected earnings in the quarter after four consecutive quarters of earnings beat. The top and bottom lines increased on a year-over-year basis.
The quarterly results reflect soft contributions from the company’s New Equipment segment due to tepid demand trends, mainly in China. The impact of lower volume and unfavorable mix in this segment hurt the quarter’s results. The downtrend was, however, partially offset by sales growth in Asia Pacific and the Americas, along with favorable price, productivity and commodity mix. Also, notable contributions from the Service segment helped improve the results to some extent.
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