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Gibraltar (ROCK) Updates GAAP EPS Outlook for 2022, Stock Up

Gibraltar Industries, Inc. ROCK recently provided preliminary financial information and updated its GAAP earnings per share guidance for 2022.

The company unveiled that it will incur a non-cash charge of $14 million or 35 cents per share, for the fourth quarter. This is to write down assets associated with the processing equipment business, which accounted for 10% of Agtech’s 2021 revenue. The processing equipment business was classified as held for sale as of Mar 31, 2022.

Gibraltar now expects GAAP earnings per share in $2.50-$2.60 range, down from the prior estimated range of $2.90-$3.00. The company maintains its revenue and adjusted EPS ranges of $1.38-$1.43 billion and $3.30-$3.40, respectively.

ROCK’s chairman and CEO, Bill Bosway, stated, "The depressed dynamics of the cannabis and hemp processing equipment market led us to pursue a divestiture of these assets. As we continue our efforts to sell this business, we have determined that its estimated fair market value is less than its carrying amount and therefore will be taking a charge to adjust book value to estimated market value. We continue to focus on our core Agtech greenhouse solutions that support our growers in the produce, commercial and cannabis markets."

Shares of this leading manufacturer and distributor of industrial and buildings market products have jumped 4.45% on Jan 31, post news release. The company plans to release its fourth-quarter 2022 results on Feb 22.

Gibraltar has been benefiting from strong Residential and Infrastructure businesses. Its focus is on simplifying operations and margin recovery with 80/20 initiatives and business mix. Its revenue projection and adjusted EPS reflects a 3-6.7% and 15.1-22.3% year-over-year rise, respectively.

Moreover, adjusted operating income of $150-$155 million is anticipated and adjusted operating margin is likely to be in 10.7-10.9% range. In 2021, adjusted operating income was $127.9 million and the adjusted operating margin was 9.7%. ROCK anticipates adjusted EBITDA of $184–$189 million, reflecting improvement from the year-ago figure of $159.7 million. Adjusted EBITDA margin is expected to be 13.1-13.3% versus 12.1% in 2021. The earnings estimate for the quarter-to-be-reported reflects 29.6% growth despite a 3.1% revenue fall.

However, the Agtech and Renewables segments have been experiencing supply chain woes and project delays. During the third quarter of 2022, the order backlog declined 7% year over year thanks to softness in these businesses.

Zacks Rank & Some Recent Construction Releases

ROCK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PulteGroup Inc. PHM reported impressive results in fourth-quarter 2022, where earnings and revenues surpassed their respective Zacks Consensus Estimates and increased year over year.

Pertaining to the result, Ryan Marshall, PulteGroup’s president and CEO, stated, “Our strong fourth quarter results allowed PulteGroup to lower its debt-to-capital ratio to 18.7% and deliver a full-year return on equity of 32.9%.”

United Rentals, Inc. URI reported fourth-quarter 2022 results. Its earnings and revenues missed the Zacks Consensus Estimate but increased on a year-over-year basis on the back of sustained demand in its end markets and the strength of its core rental business.

URI provided solid full-year 2023 guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 1.5%. The company also plans to restart its share repurchase program, with the intention of buying back $1 billion of common stock in 2023.

Weyerhaeuser Company WY reported fourth-quarter 2022 results. Although its earnings beat the Zacks Consensus Estimate, the same declined from the year-ago period's levels.

WY’s quarterly performance reflects strong execution across the businesses, which was offset by macroeconomic headwinds, supply chain disruptions and dynamic market conditions.

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