Key Takeaways
- Infrastructure company Core & Main missed profit and sales estimates as bad weather and macroeconomic conditions had an impact on its results.
- The supplier of pipes also cut its full-year guidance.
- Core & Main’s stock dropped Wednesday, turning negative for the year so far.
Shares of Core & Main (CNM), which supplies pipes for water, wastewater and other uses, posted worse-than-expected results and cut its outlook after it said bad weather and economic conditions affected sales.
The news dragged on the company’s shares down more than 14%, pulling them just into negative territory for the year so far.
The company earlier Wednesday reported second-quarter diluted earnings per share (EPS) of 61 cents, down 7.6% from a year ago. Its revenue rose 5.5% to $1.96 billion. But both results were short of analysts’ consensus forecasts provided by Visible Alpha.
Chief Executive Officer (CEO) Steve LeClair said that Core & Main was dealing with “near-term macro dynamics.” He said revenue was primarily fueled by acquisitions, and was hampered by “project delays from wet weather conditions and comparably lower end-market volumes.” In addition, the company said lower selling prices hurt the sales of its fire protection products.
Outlook Lowered on Expected Delay in Sales Growth
LeClair said that Core & Main was revising its full-year outlook downward because of the weather disruptions and the expectation that some of the growth it expected in the second half will be pushed into next year.
He said that the company sees full-year sales in the range of $7.3 billion to $7.4 billion, compared with the previous estimate of $7.5 billion to $7.6 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is predicted to drop to a range of $900 million to $930 million from the earlier $935 million to $975 million.
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