Quanex Building Products (NYSE: NX) topped Wall Street expectations for the quarter and raised its full-year outlook, predicting big things from its recently closed acquisition.

Wall Street reacted favorably to the news, sending Quanex shares up 20% as of 10:30 a.m. ET.

Solid quarter, better guidance

Quanex manufactures a wide range of building materials, including windows, doors, vinyl fencing, refrigeration, and cabinetry. Last month, the company closed a $1.1 billion acquisition of Tyman in the U.K. to increase its geographic diversification and add expertise in new product lines.

The company's last full quarter ahead of the deal was a strong one. Quanex earned $0.73 per share in its fiscal third quarter (ending July 31) on revenue of $280.4 million, surpassing Wall Street's consensus estimate of $0.70 per share on $278 million.

For the full fiscal year, Quanex now expects to generate $1.28 billion to $1.29 billion in revenue and $171 million to $176 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Previously, the company had guided for revenue of $1.1 billion and adjusted EBITDA of $145 million to $150 million.

Is Quanex a buy?

Revenue was down 6% year over year, a reflection of soft demand from end markets like housing that have been hit by higher rates. But CEO George Wilson sees big things up ahead.

"Demand remained soft, but we believe the building products industry will benefit from pent-up demand once interest rates start to trend lower and consumer confidence is restored," Wilson said. "Looking ahead, work on integrating the recently acquired Tyman business and creating something new and special within the building products industry is in progress."

Even with Friday's gains, Quanex shares are still 25% below where they were earlier this year. If Wilson is correct and demand spikes from here, Quanex shares could still have plenty of room to run.

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