What happened
Shares of Mueller Industries (NYSE: MLI) were up more than 11% as of 10:45 a.m. ET on Tuesday. The industrial products manufacturer posted strong second-quarter results this morning, helping fuel the rally in its stock price.
So what
Mueller Industries reported $1.15 billion in net sales during the second quarter, representing a 13.6% increase from the prior-year period. The company benefited from strong growth in its value-add businesses, where sales surged by 33%. That helped offset slightly lower volume in its industrial metals group due to customer inventory rebalancing and slower international copper tube volumes because of a softening global economy.
The company also posted higher earnings. Net income nearly doubled, increasing from $108.8 million to $206.6 million. Meanwhile, the company generated $142 million in cash from operations. That boosted its cash position to $202.5 million, putting its net debt at zero.
CEO Greg Christopher commented on the quarter in the earnings press release. He stated: "At the mid-way point in the year, our businesses continue to deliver excellent results. The second quarter was our twelfth consecutive quarter in which operating income grew over the prior year period."
While Mueller Industries is facing some headwinds from rising interest rates, geopolitical disruptions, and inflationary pressures, the CEO said it remains "well positioned for continued long-term growth." Most of the company's businesses remain at capacity with healthy backlogs. Meanwhile, with a pristine balance sheet, it has the financing flexibility to reinvest in its business and take advantage of strategic acquisition opportunities when they arise.
Now what
Mueller Industries continues to steadily grow its earnings, driven by rising demand for the building materials it produces. While there are concerns that the economy could slow down in the coming quarters, the company believes it can continue growing given its healthy backlog. Meanwhile, its top-notch balance sheet gives it the financial flexibility to weather a downturn and potentially capitalize on opportunities that could emerge.
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Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
