EARNINGS
Gibraltar rises above predictions
Gibraltar Industries thirdquarter profits easily topped analyst forecasts as the Hamburgbased steel processing and building products manufacturer reaped the benefits of its ongoing cost-cutting program and resiliency in its commercial building and international markets.
Gibraltar’s earnings jumped to $19.2 million, or 64 cents per share, easily outpacing the 49 cents per share that analysts were expecting and much better than the company’s $3.5 million loss a year earlier.
Brian J. Lipke, Gibraltar’s chairman and chief executive officer, said the improved earnings are a sign the the company’s cost-cutting efforts are paying off, despite continued weakness in Gibraltar’s important housing and automotive markets.
But that weakness was offset by strength within Gibraltar’s commercial building, industrial and international markets, coupled with improved profitability at its processed metals business.
Gibraltar also increased its earnings guidance for the full year, boosting its forecast to $1.47 per share to $1.54 per share, up from a range of $1.36 to $1.51 after adjusting for the $47 million sale of its SCM Metal Products business in early October.
But the outlook for 2009 is uncertain because of the shakiness of the economy and the tight credit markets that continue to depress auto sales and housing construction. “There is little clarity into 2009,” said Henning Kornbrekke, Gibraltar’s president and chief operating officer.
“It certainly remains a very difficult operating environment,” Lipke said during a conference call.
Lipke said much of the credit for Gibraltar’s improved profits this year belongs to the company’s cost-cutting efforts that began last year. The changes have involved the consolidation of 22 facilities since the beginning of last year, including four during the third quarter.
Those reduced costs, combined with aggressive debt reduction efforts that have paid off $123 million in borrowings over the last year, have helped restore Gibraltar’s profitability to levels it had not achieved since the third quarter of 2006, when the housing market began to collapse.
Lipke said the company’s lower cost structure also should help it weather an economic downturn and allow it to increase earnings at a more rapid pace once its markets begin to recover.
Gibraltar’s profits from continuing operations jumped by 69 percent to $19.3 million, or 64 cents per share, from $11.4 million, or 38 cents per share, a year ago. Sales from continuing operations rose 10 percent to $377 million from $343 million. About 40 percent of the increase in revenues was due to the three acquisitions the company has made over the last year.
