Eagle Materials Inc. reported financial results for the first quarter of fiscal 2023 ended June 30. The company is reporting record revenue of $561.4 million, up 18%; and record net earnings of $105.0 million, up 10%.
Revenue in the Heavy Materials sector, which includes cement, concrete and aggregates, joint venture and intersegment cement revenue, was $346.1 million, a 10% improvement. Heavy Materials operating earnings increased slightly to $68.1 million primarily because of higher cement sales prices partially offset by a decrease in cement sales volume and the effects of the equipment downtime experienced by its joint venture.
Cement revenue, including Joint Venture and intersegment revenue, was up 5% to $284.5 million. Operating earnings were down slightly to $62.3 million reflecting higher energy and maintenance costs partially offset by improved cement sales prices.
Profitability at its Joint Venture was also negatively affected by extended equipment downtime that reduced cement production in June. The issues causing the downtime were remedied in late July and the equipment is back on-line.
The average net cement sales price for the quarter increased 10% to $127.82 per ton. Cement sales volume for the quarter decreased 2% to 2.0 million tons, reflecting its sold-out position and the delay of some larger projects due to weather in the central part of the United States.
Concrete and aggregates revenue increased 38% to $61.6 million, reflecting improved concrete and aggregates prices and the contribution of approximately $11 million from a recently acquired business in northern Colorado. First quarter operating earnings increased 7% to $5.7 million, reflecting higher concrete and aggregates net sales prices.
Commenting on the first quarter results, Michael Haack, president and CEO, said, “Our results this quarter exceeded our expectations, as our portfolio of businesses performed well, and we executed on the opportunities available to us. We achieved record revenue of $561 million and adjusted EPS of $2.82, and we expanded gross margins by 30 bps to 26.9%. Construction activity remained healthy across our markets, and we realized broad pricing gains across our portfolio again this quarter.”
Haack continued, “In our Heavy Materials business, we implemented a second round of cement price increases in early July given the strong demand environment and our sold-out position. Looking ahead, we expect demand for cement to remain strong with infrastructure investment increasing as federal funding from the Infrastructure Investment and Jobs Act begins in earnest this fiscal year. In our light materials sector, wallboard shipments and orders remain strong, but we recognize quantitative tightening will likely have an impact on residential construction activity in the future. In the near term, we expect record home construction backlogs to support product demand this year. With Eagle’s excellent balance sheet, the favorable geographic positioning of our operations and consistent execution of our operating strategies, we are poised for a strong fiscal 2023.”