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Reflecting On Building Materials Stocks’ Q3 Earnings: UFP Industries (NASDAQ:UFPI)

Reflecting On Building Materials Stocks’ Q3 Earnings: UFP Industries (NASDAQ:UFPI)
UFPI Cover Image
Reflecting On Building Materials Stocks’ Q3 Earnings: UFP Industries (NASDAQ:UFPI)

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the building materials stocks, including UFP Industries (NASDAQ:UFPI) and its peers.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of 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 building materials companies.

The 9 building materials stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2.8% above.

Luckily, building materials stocks have performed well with share prices up 12.1% on average since the latest earnings results.

Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.

UFP Industries reported revenues of $1.65 billion, down 9.8% year on year. This print fell short of analysts’ expectations by 6.5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.

“Our third quarter results were impacted by softer demand and broad-based pricing pressure which reduced our revenue and profit margins.” said Chairman and CEO Matthew J. Missad.

UFP Industries Total Revenue
UFP Industries Total Revenue

UFP Industries delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 2.8% since reporting and currently trades at $135.26.

Read our full report on UFP Industries here, it’s free.

With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.

AZEK reported revenues of $348.2 million, down 10.4% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with an impressive beat of analysts’ adjusted operating income estimates.

AZEK Total Revenue
AZEK Total Revenue

AZEK scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.5% since reporting. It currently trades at $51.80.

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