Eagle Materials Inc. reported financial results for the third quarter of fiscal 2023 ended Dec. 31, 2022. The company is reporting record revenue of $511 million, up 10%.; and record net earnings of $117 million, up 14%.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was up 3% to $311 million. Heavy Materials operating earnings declined 11% to $75 million, primarily because of lower Cement sales volume partially offset by higher Cement net sales prices. Cement sales volume was affected by lower cement inventory levels compared with the prior-year period as well as difficult weather conditions during this quarter.
Cement revenue for the quarter, including Joint Venture and intersegment revenue, was down 2% to $256 million, and operating earnings were down 9% to $72 million. The decline reflects lower Cement sales volume partially offset by higher net sales prices. The average net Cement sales price for the quarter increased 13% to $134.36 per ton. Cement sales volume for the quarter was 1.7 million tons, down 13% versus the prior-year period.
Concrete and Aggregates revenue increased 30% to $55 million, reflecting higher sales volume and Concrete pricing as well as the contribution of approximately $10 million from the acquired business in northern Colorado. Operating earnings for Concrete and Aggregates decreased 35% to $3 million, primarily reflecting higher input costs.
Revenue in the Light Materials sector, which includes Gypsum Wallboard and Paperboard, increased 23% to $235 million, reflecting higher Wallboard and Paperboard sales volume and prices. Gypsum Wallboard sales volume increased 5% to 728 million sq. ft. (MMSF), while the average Gypsum Wallboard net sales price increased 25% to $238.51 per MSF.
Commenting on the results, Michael Haack, president and CEO, said, “We are pleased to announce another exceptional quarter at Eagle. In the third quarter, we achieved record revenue of $511 million and record EPS of $3.20, and we expanded gross margins by 110 bps to 31.0%. Third quarter performance was led by our Gypsum Wallboard business, in which margins expanded 400 bps. Construction activity remained healthy across our markets, despite delayed projects in the Midwest and Texas due to wet and extreme cold weather, which affected cement production and shipments. Utilization rates remained high across our network. During the quarter, we generated strong free cash flow and repurchased 824,000 shares of our common stock. Cash returned to shareholders in the quarter was approximately $113 million, bringing total cash returned to $342 million in the first nine months of the fiscal year. We also continued to make strides towards our environmental stewardship goals, including expanding the production and sale of our eco-friendly Portland Limestone Cement during the quarter.”
Haack concluded, “Eagle’s heartland geographic footprint is well-positioned for long-term growth, supported by population-growth trends, shortages of residential units, and a multi-year federal highway bill further enhanced by state-level infrastructure spending. In the near term, we expect the strength in private non-residential and infrastructure construction activity to lessen the impact of affordability-driven headwinds in single-family residential construction.”