Beacon Roofing Misses Estimates

Beacon Roofing Supply, Inc. (BECN) reported first-quarter 2013 adjusted earnings per share (EPS) of 37 cents, down 5% from 39 cents earned in the year-ago quarter and below the Zacks Consensus Estimate of 41 cents.

Operational Update

Total revenue increased 5% year over year to $513.7 million but missed the Zacks Consensus Estimate of $531 million. Organic sales declined 4.6% in the quarter. In existing markets, complementary product sales increased 2.9% but both residential and non-residential roofing product sales decreased 5.4% and 6.1%, respectively.

The current quarter benefited from the positive impact of several acquisitions completed since the start of last year, offset by lower average residential roofing selling prices. The quarter was pitted against a strong year-ago quarter, which saw a very high level of re-roofing activity, including the beneficial impact from mild weather in Dec 2011 and strong business in several markets that experienced significant storms in 2011.

Cost of goods sold increased 4% to $387 million in the quarter. Gross profit rose 8% to $127 million. Gross margin expanded 70 basis points to 25% from the year-ago quarter. Operating income in the reported quarter decreased 6% to $32 million with operating margin contracting 70 basis points to 6.3%.

Financial Position

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Beacon Roofing Misses Estimates