Shares of Tecnoglass (NYSE: TGLS) were down 10.9% as of 3:15 p.m. ET Monday after the high-end window and architectural glass company announced strong third-quarter results, but followed with underwhelming forward guidance.
Tecnoglass' quarterly revenue grew 4.4% year over year to $210.7 million, translating to adjusted (non-GAAP) net income of $46.6 million, or $0.98 per share. Analysts, on average, were looking for slightly lower adjusted earnings of $0.97 per share on revenue of $207.6 million.
Tecnoglass' solid third quarter just wasn't enough
The company's top-line growth was entirely organic, including a 2% increase in revenue from the single-family residential end market to 87.8 million, and 6% growth from multi-family/commercial revenue sources to comprise the remainder.
"Steady demand for our best-in-class, innovative products contributed to record single-family residential revenues, which continues to outperform despite a challenging environment," said Tecnoglass Chief Operating Officer Christian Daes. Daes added that positive momentum continues within the company's multi-family/commercial segment, with a backlog growing to $836 million, "giving us confidence in the trajectory of this business with a solid project pipeline into 2025."
On Tecnoglass' tempered guidance
Based on visibility for the timing of project deliveries through the end of the year, however, Tecnoglass also reduced its full-year 2023 outlook to call for revenue of $835 million to $848 million -- down from $830 million to $855 million previously -- or 17% growth at the midpoint. Coupled with expectations for unfavorable noncash foreign currency exchange, as well as a higher mix of installation revenue in Q4, the company also lowered its outlook for 2023 adjusted EBITDA to be in the range of $300 million to $308 million, down from its prior range of $320 million to $335 million.
That's not to say Tecnoglass is a broken business. But the market obviously hates to see any given company lower its full-year guidance even after delivering a quarterly beat. It's hard, then, to blame some investors for taking a step back from the stock today.
10 stocks we like better than Tecnoglass
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Tecnoglass wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 6, 2023
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
