Eagle’s Heavy Materials Revenue Up 9%

Eagle Materials Inc. reported financial results for the third quarter of fiscal 2022 ended Dec. 31, 2021. The company is reporting:

  • Revenue of $463 million, up 14%.
  • Record diluted EPS from continuing operations of $2.53, up 30%.
  • Repurchased 1.2 million shares of Eagle’s common stock for $188 million.

Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was up 9% to $303.5 million. Heavy Materials operating earnings increased 11% to $84.0 million, primarily because of improved Cement sales volume and net sales prices.

Cement revenue for the quarter, including Joint Venture and intersegment revenue, was up 12% to $261.2 million, and operating earnings were $79.8 million, up 13%. These increases reflect improved Cement sales volume and net sales prices.

  • The average net cement sales price for the quarter increased 6% to $118.44 per ton. 
  • Cement sales volume for the quarter was 2.0 million tons, up 7% versus the prior-year period.
  • Concrete and Aggregates revenue decreased 3% to $42.4 million.
  • Operating earnings for Concrete and Aggregates decreased 19% to $4.1 million.

The declines primarily reflect lower Concrete and Aggregates sales volume and higher fuel costs, partially offset by improved pricing.

Commenting on the third quarter results, Michael Haack, president and CEO, said, “Our record results this quarter reflect both continued strength in U.S. construction activity and excellent execution by our team as supply chain challenges continued to dominate the broader industrial marketplace. We generated strong free cash flow during the quarter, and repurchased 1.2 million shares of our common stock for a total cash return to shareholders of nearly $200 million.

“I’m also proud to share that, during the first nine months of our fiscal year, we achieved the best safety performance in our history, demonstrating our deep commitment to our people and their well-being,” Haack said. “During the quarter, we also continued to make strides towards our environmental stewardship goals; we are now producing and selling our eco-friendly Portland Limestone Cement from four Eagle cement facilities.”

Haack concluded, “We continue to see positive demand trends across our geographic footprint, driven by increased residential construction activity and expanded infrastructure investment. These trends should support growing construction activity and contribute to attractive pricing across our heavy and light materials businesses. We enter the last quarter of our fiscal year in a position of strength, with an excellent balance sheet enabling us to continue to execute on our core strategies.”

Revenue in the Light Materials sector, which includes Gypsum Wallboard and Paperboard, increased 21% to $192.1 million, reflecting higher Wallboard and Paperboard sales prices. Gypsum Wallboard sales volume was 695 million sq. ft. (MMSF), down 4%, while the average Gypsum Wallboard net sales price increased 29% to $191.41 per MSF. The decline in Wallboard sales volume was due to ongoing homebuilder supply chain difficulties; however, order pace improved during the quarter.

Paperboard sales volume for the quarter increased 3% to 81,000 tons. The average Paperboard net sales price was $585.54 per ton, up 21% from the prior-year period, consistent with the pricing provisions in our long-term sales agreements.

Operating earnings were $63.2 million in the sector, up 32%, reflecting increased Wallboard sales pricing. This was partially offset by higher operating costs, primarily related to recycled fiber and energy.

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