HOUSTON - Quanex (NYSE:NX) Building Products Corporation (NYSE:NX) reported mixed fourth quarter results Thursday, with earnings falling short of expectations despite stronger-than-anticipated revenue. The company's shares dropped 3.2% following the release.
The building products manufacturer posted adjusted earnings per share of $0.61 for the quarter ended October 31, missing analyst estimates of $0.63. However, revenue surged 66.6% YoY to $492.2 million, surpassing the consensus forecast of $440.48 million.
The substantial revenue increase was primarily attributed to the contribution from Quanex's acquisition of Tyman, which closed on August 1, 2024. Excluding Tyman's impact, net sales would have declined 2.3% in the fourth quarter.
"On a consolidated basis, results for the fourth quarter and full year were boosted by the contribution from the Tyman acquisition. Results from the legacy Quanex business were in-line with our expectations for both the fourth quarter and full year," said George Wilson, Chairman, President and Chief Executive Officer.
The company's North American Fenestration segment saw a 4.7% YoY decline in net sales for Q4, while the North American Cabinet Components segment reported a 1.7% increase. The European Fenestration segment experienced a 1.2% decrease in net sales, excluding foreign exchange impact.
Quanex's adjusted EBITDA for the quarter rose to $81.1 million from $50.8 million in the same period last year, with the adjusted EBITDA margin slightly contracting to 16.5% from 17.2%.
The company repaid $53.75 million in debt during the fourth quarter following the Tyman acquisition. As of October 31, Quanex's leverage ratio of Net Debt to LTM Adjusted EBITDA stood at 3.7x.
Looking ahead, Wilson noted, "As we transition into 2025, we expect the current demand softness to persist until the spring selling season, but our expectations are that results will improve in the second half of 2025 due to typical seasonality combined with the benefit from unwinding pent up demand as interest rates continue to trend lower and consumer confidence improves."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.