As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the building materials industry, including Resideo (NYSE: REZI) and its peers.
Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.
The 8 building materials stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 5% on average since the latest earnings results.
Resideo (NYSE: REZI)
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Resideo reported revenues of $1.94 billion, up 22.3% year on year. This print exceeded analysts’ expectations by 6.1%. Overall, it was an exceptional quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations.
"Resideo had an exceptional second quarter, reporting record high results that were above the high-end of the range for all our key financial metrics. We are pleased to report that both the ADI and Products and Solutions segments generated organic net revenue growth, gross margin expansion, and robust Adjusted EBITDA growth," said Jay Geldmacher, Resideo's President and CEO.
Resideo achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 55.3% since reporting and currently trades at $40.78.
Is now the time to buy Resideo? Access our full analysis of the earnings results here, it’s free.
Best Q2: Armstrong World (NYSE: AWI)
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $424.6 million, up 16.3% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with a solid beat of analysts’ organic revenue and EBITDA estimates.
The market seems happy with the results as the stock is up 13.8% since reporting. It currently trades at $192.17.
Is now the time to buy Armstrong World? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Carlisle (NYSE: CSL)
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Carlisle reported revenues of $1.45 billion, flat year on year, falling short of analysts’ expectations by 3.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 19.9% since the results and currently trades at $327.74.
Read our full analysis of Carlisle’s results here.
Vulcan Materials (NYSE: VMC)
Founded in 1909, Vulcan Materials (NYSE: VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Vulcan Materials reported revenues of $2.10 billion, up 4.4% year on year. This number missed analysts’ expectations by 4.8%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.
Vulcan Materials had the weakest performance against analyst estimates among its peers. The stock is up 8% since reporting and currently trades at $294.76.
Read our full, actionable report on Vulcan Materials here, it’s free.
Tecnoglass (NYSE: TGLS)
The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $255.5 million, up 16.3% year on year. This result beat analysts’ expectations by 4.3%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates.
The stock is down 16.1% since reporting and currently trades at $65.70.
Read our full, actionable report on Tecnoglass here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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