Eagle Materials Inc. reported record second-quarter revenue of $414.5 million, up 9%; and record second quarter net earnings per diluted share of $1.72, up 12%.
The second quarter impact of costs related to the company’s planned separation of its businesses was $2.7 million (pre-tax), or $0.05 per diluted share.
Commenting on the second quarter results, Michael Haack, president and CEO, said, “We are proud to have achieved record revenue and net earnings per share for the second quarter of our fiscal year 2020. Our second quarter performance was driven mostly by increased cement shipments, cost control initiatives and strong operational execution, as we capitalized on the robust underlying demand across our geographic footprint. Notably, our Cement sales volume was up 14% to a record 1.8 million tons. Market demand for our Wallboard also remained healthy when adjusted for buying activity ahead of our Wallboard price increase last year. The outlook for the remainder of the year continues to be positive. Demand for our building materials and construction products is supported by a number of favorable market dynamics including ongoing growth in jobs, high consumer confidence and low interest rates.”
Haack concluded, “Our low-cost operations continued to generate strong cash flow, which we are investing to further improve our operational efficiency and low-cost position, while at the same time we continued to repurchase shares in line with our capital allocation strategy. During the first half of our fiscal year, we purchased approximately 3.6 million shares, or 8% of our outstanding shares, and we returned more than $320 million to shareholders, through a combination of share repurchases and dividends.”
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates and joint venture and intersegment Cement revenue, was $282.6 million, a 22% increase from the second quarter of fiscal 2019. Heavy Materials operating earnings improved 20% to $73.8 million primarily because of increased sales volume and net sales prices.
Cement revenue for the quarter, including joint venture and intersegment revenue, was up 18% to $227.0 million, reflecting improved sales volume and net sales prices. Cement sales volume for the quarter was a record 1.8 million tons, up 14% versus the prior year. The average net sales price for the quarter improved 2% to $109.35 per ton.
Operating earnings from Cement were a record $66.5 million, 16% above the same quarter a year ago. The earnings improvement was primarily due to higher sales volume and net sales prices.
Eagle Materials Concrete and Aggregates revenue for the second quarter was $55.6 million, an increase of 42%. Second quarter operating earnings were $7.3 million, a 77% increase, reflecting record Concrete sales volume, improved Concrete sales prices and the financial results of a recently acquired small concrete and aggregates business.
As previously announced on May 30, the company plans to separate its Heavy Materials and Light Materials businesses into two independent, publicly traded corporations by means of a tax-free spin-off to Eagle shareholders. The company also previously announced it is actively pursuing alternatives for its Oil and Gas Proppants business.