As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the building products industry, including Tecnoglass (NYSE:TGLS) and its peers.
Traditionally, building products companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, energy efficiency and conservation trends are driving innovation, leading to incremental demand. Additionally, advances to address labor availability and job site productivity have also spurred innovation. However, these companies are still at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. So too are the costs of raw materials, whose prices can be driven by a myriad of worldwide factors and greatly influence the profitability of commercial building products companies.
The 9 building products stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 2%. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and building products stocks have had a rough stretch, with share prices down 8.4% on average since the previous earnings results.
Weakest Q1: Tecnoglass (NYSE:TGLS) The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $192.6 million, down 4.9% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' operating margin and earnings estimates.
The stock is down 12.2% since the results and currently trades at $45.59.
Is now the time to buy Tecnoglass? Find out by reading the original article on StockStory, it's free.
Best Q1: Advanced Drainage (NYSE:WMS) Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America.
Advanced Drainage reported revenues of $653.8 million, up 5.9% year on year, outperforming analysts' expectations by 6.9%. It was an exceptional quarter for the company, with a solid beat of analysts' operating margin and earnings estimates.
The stock is down 2.9% since the results and currently trades at $171.
A. O. Smith (NYSE:AOS) Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.
A. O. Smith reported revenues of $978.8 million, up 1.3% year on year, falling short of analysts' expectations by 1.7%. It was a weak quarter for the company, with a miss of analysts' earnings and organic revenue estimates.
A. O. Smith had the weakest performance against analyst estimates in the group. The stock is down 5.2% since the results and currently trades at $82.46.
Armstrong World (NYSE:AWI) Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $326.3 million, up 5.2% year on year, surpassing analysts' expectations by 2.1%. It was an impressive quarter for the company, with full-year revenue guidance exceeding analysts' expectations and a decent beat of analysts' operating margin estimates.
The stock is down 5% since the results and currently trades at $112.93.
Fortune Brands (NYSE:FBIN) Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE:FBIN) makes plumbing, security, and outdoor living products.
Fortune Brands reported revenues of $1.11 billion, up 6.7% year on year, surpassing analysts' expectations by 2.7%. It was a very strong quarter for the company, with an impressive beat of analysts' organic revenue estimates and a decent beat of analysts' operating margin estimates.
Fortune Brands achieved the fastest revenue growth among its peers. The stock is down 7.9% since the results and currently trades at $67.33.
