Eagle Materials achieves record revenue
Eagle Materials has reported record revenue of US$511m in the third quarter of fiscal 2023 ended 31 December 2022, marking a YoY increase of 10 per cent. Record net earnings were also seen over the quarter, coming in at US$117m, up 14 per cent YoY, while net earnings per share (EPS) advanced by 26 per cent to US$3.20. Adjusted EBITDA saw growth of 14 per cent YoY to US$199m.
Commenting on the results, Michael Haack, president and CEO of Eagle Materials, said, “We are pleased to announce another exceptional quarter at Eagle. In the third quarter, we achieved record revenue of US$511m and record EPS of US$3.20, and we expanded gross margins by 110bps to 31.0 per cent. Third-quarter performance was led by our Gypsum Wallboard business, in which margins expanded 400bps. Construction activity remained healthy across our markets, despite delayed projects in the Midwest and Texas due to wet and extreme cold weather, which affected cement production and shipments. Utilisation rates remained high across our network. During the quarter, we generated strong free cash flow and repurchased 824,000 shares of our common stock. Cash returned to shareholders in the quarter was approximately US$113m, bringing total cash returned to US$342m in the first nine months of the fiscal year.”
Revenue in the Heavy Materials sector, which includes cement, concrete and aggregates, as well as joint venture and intersegment cement revenue, was up three per cent to US$311m. Heavy Materials operating earnings declined 11 per cent to US$75m, primarily due to lower cement sales volumes partially offset by higher cement net sales prices. Cement sales volumes were affected by lower cement inventory levels compared with the prior-year period as well as difficult weather conditions during this quarter.
Cement revenue for the quarter was down two per cent to US$256m, and operating earnings were down nine per cent to US$72m, due to lower cement sales volumes partially offset by higher net sales prices. The average net cement sales price for the quarter increased 13 per cent to US$134.36/t. Cement sales volumes for the quarter came in at 1.7Mt, down 13 per cent YoY. Concrete and aggregates revenue increased 30 per cent to US$55m, driven by higher sales volumes and concrete pricing as well as the contribution of approximately US$10m from the acquired business in northern Colorado. Operating earnings for concrete and aggregates fell 35 per cent to US$3m due to higher input costs.
Revenue in the Light Materials sector, which includes gypsum wallboard and paperboard, increased 23 per cent to US$235m, driven by higher wallboard and paperboard sales volumes and prices. Gypsum wallboard sales volumes increased five per cent to 728Mft2, while the average gypsum wallboard net sales price improved by 25 per cent. Paperboard sales volumes for the quarter were down five per cent to 77,000t, while the average paperboard net sales price was up two per cent at US$594.93/t. Operating earnings in the sector were US$95m, up 51 per cent on the back of higher wallboard sales volumes and pricing, along with a sharp reduction in raw material costs.
