Simpson Beats Earnings Estimates - Analyst Blog

By
A A A

Simpson Manufacturing Co., Inc. ( SSD ) reported second-quarter 2013 earnings of 38 cents per share, up 15% from 33 cents in the year-earlier quarter. Results were way ahead of the Zacks Consensus Estimate of 32 cents.

Operational Update

Total revenue increased 7.6% to $195.6 million from $181.7 million in the year-ago quarter, surpassing the Zacks Consensus Estimate of $194 million. The rise was primarily attributable to improved North American sales, due to increased homebuilding activity, partly offset by reduced home center sales and lower selling prices.

Cost of sales increased 7.7% to $106 million from $98.5 million in the prior-year quarter. Gross profit was $89 million, up 7.5% from $83 million in the year-ago quarter. Gross margin was 45.7% compared to 45.8% in the prior-year quarter.

Research and development and engineering expenses increased 4.9% to $9.5 million year over year from $9 million. Selling expenses went up 8.9% to $21.7 million from $19.9 million in the prior-year quarter. General and administrative expenses grew 5.6% to $28.6 million from $27.1 million in the second quarter of 2012, attributable to the replacement of Keymark resulted in the rise of personnel costs.

Income from operations increased 9% year over year to $29.6 million. Consequently, operating margin expanded 20 basis points to 15%.

Segment Performance

Revenues in the North American segment grew 11% to $159.7 million from $144.5 million in the year-ago quarter. Segment gross profit went up 9% to $76 million from $69.7 million in the prior-year quarter.

Total revenue for the European segment went down 6% year over year to $32 million, due to the exit of the heavy-duty mechanical anchor business. The region's economic conditions, adverse weather conditions and price decrease also affected sales. Gross profit in the segment was $12.5 million versus $12.7 million in the prior-year quarter, down 1%.

Asia/Pacific segment's total revenue increased 28% to $3.5 million from $2.7 million in the year-ago quarter. Segment gross profit rose 160% year over year to $0.8 million.

Financial Position

Cash and short-term investments amounted to $165 million as of Jun 30, 2013, up from $162 million as of Jun 30, 2012. The company has no debt on its balance sheet.

Our Take

For 2013, Simpson expects gross margin to be in the range of 42-43%. Capital Expenditure is expected around $29-$30 million. Depreciation and amortization expense for the full year is expected to be $27-$28 million.

Simpson expects to benefit from its ongoing investments in strategic initiatives, which include an expanded offering of concrete and reinforcing products and systems, particularly specialty chemicals and software offerings.

Pleasanton, Calif.-based Simpson is a leading manufacturer of wood construction products, which includes connectors, truss plates, fastening systems, fasteners and shearwalls. The company, through its subsidiary, Simpson Strong-Tie Company Inc., designs and engineers concrete construction products comprising adhesives, specialty chemicals, mechanical anchors and powder actuated tools.

Simpson currently has a Zacks Rank #3 (Hold).

Other stocks with favorable a Zacks Rank in the building and construction industry are James Hardie Industries plc ( JHX ), Aegion Corporation ( AEGN ) and USG Corporation ( USG ). While James Hardie holds a Zacks Rank #1 (Strong Buy), Aegion Corporation and USG Corporation carry a Zacks Rank #2 (Buy),



AEGION CORP (AEGN): Free Stock Analysis Report

JAMES HARDI-ADR (JHX): Free Stock Analysis Report

SIMPSON MFG INC (SSD): Free Stock Analysis Report

USG CORP (USG): Free Stock Analysis Report

To read this article on Zacks.com click here.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AEGN , JHX , SSD , USG

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

48,099,947
  • $16.09 ▲ 0.50%
40,277,806
  • $102.50 ▲ 0.24%
40,236,499
  • $19.57 ▲ 2.35%
31,092,510
  • $49.75 ▲ 0.65%
30,795,218
  • $34.92 ▲ 0.78%
29,910,855
  • $3.63 ▲ 0.83%
24,019,154
  • $13.06 ▼ 0.38%
23,753,906
  • $74.82 ▲ 1.31%
As of 8/29/2014, 04:04 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com