Gibraltar Industries lost $13.7 million during the third quarter as a big write-down at its European business offset stronger-than-expected earnings from the Hamburg-based building products manufacturer’s operations.
The $23.4 million write-down at its European fabricated metal products business, which has struggled in the weak European economy, masked widespread improvement in Gibraltar’s other operations, where sales increased and profitability improved, prompting the company to hike its earnings forecast for this year.
Gibraltar executives said they expect the company’s adjusted earnings per share, which exclude one-time charges, to be at the high end of their previous guidance, ranging between 63 cents and 66 cents per share. The company earned 65 cents per share last year, and Gibraltar’s August earnings guidance predicted profits this year of between 54 cents and 64 cents per share.
“Gibraltar overperformed in this quarter on both the top and bottom lines,” said Brian J. Lipke, Gibraltar’s chairman and chief executive officer, during a conference call Thursday.
Lipke said he expects further improvement in the company’s construction markets and its operations next year.
“A number of economic indicators suggest a strengthening of demand in building products,” he said. “We have a growing confidence that 2014 will be a stronger year for Gibraltar.”
During the third quarter, Gibraltar lost $13.7 million, or 44 cents per share, compared with a profit of $7.3 million, or 24 cents per share a year ago, with all of the loss coming from the write-down at its European business.
Excluding that write-down, Gibraltar earned $9.6 million, or 31 cents per share, a 23 percent improvement from the $7.4 million, or 24 cents per share, it earned a year ago. That easily topped the 23 cents per share that analysts had expected.
The company’s sales rose by 6 percent to $217.4 million from $205.5 million a year ago, slightly lower than the $224 million in revenues that analysts had forecast.
All of the company’s sales growth came from acquisitions that it has made during the past year, with those additions adding $13 million to Gibraltar’s third-quarter revenues. Without those acquisitions, Gibraltar’s sales would have declined slightly.
The company’s new residential construction market, which accounts for about 8 percent of its revenues, improved by about 10 percent during the quarter, with the multi-family housing segment especially strong, said Henning Kornbrekke, who retired in September as the company’s chief operating officer.
Gibraltar’s industrial and infrastructure markets, which account for about half of the company’s revenues, continued to be weak, which led to a 4 percent decline in average pricing. The residential repair and remodeling market, which contributes about a third of the company’s revenues, was flat, Kornbrekke said.
The company also slashed its interest expenses by 18 percent after refinancing its long-term debt to reduce its interest rate by two percentage points, saving the company more than $800,000 during the quarter.
Gibraltar’s shares closed Thursday up 4.98 percent, or 76 cents, at $16.01.