UFP Industries: Q4 Results Beat Estimates, Revenue Declines

Company Overview

UFP Industries (UFPI) is a building materials manufacturer that operates in the construction, retail, and industrial sectors. Its offerings include lumber, plywood, engineered wood products, and other building supplies.

Financial Performance

* Q4 2024 Revenue: $1.46 billion (beat estimates by 2.7%, year-over-year decline of 4.1%)
* Q4 2024 Earnings Per Share (EPS): $1.12 (missed estimates by 9.3%)
* Adjusted EBITDA: $132.7 million (beat estimates by 3.2%)
* Operating Margin: 5.4% (down from 8.1% in Q4 2023)

Sales Growth

Over the past five years, UFP Industries has experienced a compounded annual growth rate (CAGR) of 8.5% in sales. However, in the past two years, revenue has declined at an annualized rate of 16.9%. For the next 12 months, analysts forecast a modest 3.1% growth in revenue.

Profitability

UFP Industries' operating margin has averaged 8.5% over the past five years, which is higher than the industry average. While the margin has fluctuated, it has remained relatively stable. In Q4 2024, the operating margin decreased to 5.4%, primarily due to a decline in gross margin.

Earnings Per Share

Over the past five years, UFP Industries' EPS has grown at a CAGR of 18.1%, outpacing revenue growth. However, a closer examination reveals that share buybacks have contributed to this EPS growth, rather than operational efficiency. In Q4 2024, EPS declined to $1.12 from $1.71 in the prior year.

Key Takeaways

UFP Industries beat revenue and EBITDA estimates but missed EPS targets in its Q4 2024 financial report. While the company's valuation and business qualities should be considered, the latest earnings results indicate a mixed performance with some strengths and weaknesses. Analysts expect modest EPS growth in the coming year, and investors should carefully assess the company's prospects before making investment decisions.