Q2 Earnings Outperformers: Valmont (NYSE:VMI) And The Rest Of The Building Materials Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Valmont (NYSE:VMI) and its peers.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 9 building materials stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 2.9% above.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Luckily, building materials stocks have performed well with share prices up 11.1% on average since the latest earnings results.

Valmont (NYSE:VMI)

Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.

Valmont reported revenues of $1.04 billion, flat year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

President and Chief Executive Officer Avner M. Applbaum commented, “Our team demonstrated their dedication to enhancing shareholder value by delivering another quarter of operating margin expansion and earnings per share growth.”

Interestingly, the stock is up 9.6% since reporting and currently trades at $297.20.

Is now the time to buy Valmont? Access our full analysis of the earnings results here, it’s free.

Best Q2: UFP (NASDAQ:UFPI)

Beginning as a lumber supplier in the 1950s, UFP (NASDAQ:UFPI) makes a wide range of building materials for the construction, retail, and industrial sectors

UFP reported revenues of $1.90 billion, down 6.9% year on year, outperforming analysts’ expectations by 1.6%. The business had a very strong quarter with an impressive beat of analysts’ volume estimates and a decent beat of analysts’ operating margin estimates.

The market seems content with the results as the stock is up 2% since reporting. It currently trades at $129.58.

Is now the time to buy UFP? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Vulcan Materials (NYSE:VMC)

Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.

Vulcan Materials reported revenues of $2.01 billion, down 4.7% year on year, falling short of analysts’ expectations by 1.2%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Vulcan Materials delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.5% since the results and currently trades at $238.03.

Read our full analysis of Vulcan Materials’s results here.

Armstrong World (NYSE:AWI)

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.

Armstrong World reported revenues of $365.1 million, up 12.2% year on year. This print surpassed analysts’ expectations by 1.3%. Taking a step back, it was a satisfactory quarter as it also produced full-year revenue guidance beating analysts’ expectations but a miss of analysts’ organic revenue estimates.

Armstrong World achieved the fastest revenue growth among its peers. The stock is up 1.9% since reporting and currently trades at $133.26.

Read our full, actionable report on Armstrong World here, it’s free.

Carlisle (NYSE:CSL)

Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE:CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.

Carlisle reported revenues of $1.45 billion, up 11% year on year. This print met analysts’ expectations. It was a strong quarter as it also recorded an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.

The stock is up 13.1% since reporting and currently trades at $466.21.

Read our full, actionable report on Carlisle here, it’s free.

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