On July 30, 2024, Eagle Materials Inc (EXP, Financial) released its 8-K filing reporting financial results for the first quarter of fiscal 2025, ending June 30, 2024. Eagle Materials Inc produces and sells construction products and building materials, including cement, slag, concrete, aggregates, gypsum wallboard, and recycled paperboard. The company operates in two main sectors: Heavy Materials and Light Materials.
Performance Overview
Eagle Materials Inc reported record revenue of $608.7 million, below the analyst estimate of $624.18 million. The company also reported earnings per share (EPS) of $3.94, exceeding the estimated $3.78. This represents a 16% growth in EPS compared to the same quarter last year.
Commenting on the first quarter results, Michael Haack, President and CEO, said, “Fiscal 2025 is off to a solid start for Eagle, with record revenue of $608.7 million, EPS of $3.94, and gross margins of 30.7%, an increase of 140 bps. Our portfolio of businesses continued to perform well despite adverse weather conditions during the quarter across many of our core markets, which affected sales volumes for our Cement and Concrete and Aggregates businesses.”
Segment Financial Results
In the Heavy Materials sector, which includes Cement, Concrete, and Aggregates, revenue was $400.2 million, a 1% improvement from the previous year. Operating earnings in this sector increased by 14% to $92.1 million, primarily due to higher Cement sales prices, despite a decline in sales volume. Cement revenue, including Joint Venture and intersegment revenue, rose by 3% to $339.2 million, with operating earnings up 20% to $89.1 million.
In the Light Materials sector, which includes Gypsum Wallboard and Paperboard, revenue increased by 2% to $248.1 million. Operating earnings in this sector rose by 5% to $102.5 million, driven by higher Gypsum Wallboard sales prices and lower operating costs. Gypsum Wallboard sales volume declined by 1% to 757 million square feet, while the average net sales price increased by 1% to $239.43 per MSF. Paperboard sales volume increased by 10% to a record 91,000 tons, with the average net sales price up 11% to $597.41 per ton.
Financial Achievements and Metrics
Eagle Materials Inc's gross profit for the quarter was $186.9 million, up from $176.0 million in the same period last year. The company reported net earnings of $133.8 million, compared to $120.8 million in the previous year. The net leverage ratio (net debt to Adjusted EBITDA) stood at 1.3x, providing substantial financial flexibility for disciplined capital allocation and long-term growth.
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Revenue | $608.7 million | $601.5 million |
| Gross Profit | $186.9 million | $176.0 million |
| Net Earnings | $133.8 million | $120.8 million |
| EPS | $3.94 | $3.40 |
Analysis and Outlook
The company's performance highlights its resilience and ability to navigate adverse weather conditions that impacted sales volumes in key markets. The increase in Cement sales prices and the strategic cost control initiatives contributed significantly to the improved financial results. The company's strong balance sheet and substantial cash flow generation position it well for continued growth and capital allocation.
Overall, Eagle Materials Inc's first-quarter results demonstrate a robust start to fiscal 2025, with record revenue and significant EPS growth. The company's strategic focus on operational efficiency and market demand fundamentals bodes well for sustained performance in the coming quarters.
Explore the complete 8-K earnings release (here) from Eagle Materials Inc for further details.
