PLEASANTON, Calif. - Simpson Manufacturing Co., Inc. (NYSE: NYSE:SSD), a major supplier of structural connectors and building solutions, reported a dip in first-quarter earnings and revenue, missing analysts' expectations. The company reported a first-quarter earnings per share (EPS) of $1.77, which was $0.13 short of the analyst estimate of $1.90. Revenue for the quarter also fell below the consensus estimate of $544.97 million, coming in at $530.6 million.
The company's stock price reflected the market's reaction to the earnings miss, with shares falling 11.41% following the announcement. This significant drop suggests investor concerns over the company's performance and future outlook.
Compared to the same quarter last year, Simpson Manufacturing's consolidated net sales decreased by 0.7%, from $534.4 million to $530.6 million. The modest decline was attributed to a mix of factors. In North America, net sales saw a slight increase of 0.1% despite an 8% increase in sales volumes, which was offset by volume discount timing and price decreases implemented in 2023. European net sales decreased by 3.4%, mainly due to lower sales volumes, although this was partially mitigated by favorable foreign currency translation effects.
"I am pleased with our first quarter performance in what continues to be a challenging market for new housing starts in both the U.S. and Europe," said Mike Olosky, President and CEO of Simpson Manufacturing. He highlighted the company's focus on pricing discipline and cost management, which maintained a relatively high gross margin in Europe despite the challenges.
Looking ahead, Simpson Manufacturing provided financial guidance for the full fiscal year ending December 31, 2024. The company anticipates an operating margin range of 20.0% to 21.5% and an effective tax rate between 24.5% and 25.5%. Capital expenditures are expected to be approximately $185.0 million, including significant investments in facility expansions.
Despite the first-quarter setback, the company remains focused on strategic investments aimed at driving organic growth and preparing for a housing market recovery anticipated in 2025. "We believe the strategic investments we are making in the business will help us accelerate our historical average performance for compounded annual growth in North America sales volumes above the market of approximately 250 basis points over the mid to long-term while also returning to top quartile profitability," Olosky stated.
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