UFP Industries, Inc. UFPI is scheduled to release fourth-quarter 2024 results on Feb. 17, after market close.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 9.4%, while net sales missed the same by 7.2%. Furthermore, on a year-over-year basis, earnings and net sales decreased 21.9% and 10%, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
UFP Industries’ earnings topped the consensus mark in two of the trailing four quarters and missed on two occasions, with an average surprise of 2.6%.
Trend in UFPI’s Estimate Revision
The Zacks Consensus Estimate for UFP Industries’ fourth-quarter 2024 earnings has remained stable at $1.23 per share in the past 60 days. The estimated figure indicates a 24.1% decrease from the year-ago quarter’s reported earnings of $1.62 per share.
UFP Industries, Inc. Price and EPS Surprise
UFP Industries, Inc. price-eps-surprise | UFP Industries, Inc. Quote
For net sales, the consensus mark is pegged at $1.44 billion, indicating a 5.5% year-over-year decline.
Factors to Note Ahead of UFPI’s Q4 Earnings Release
Revenues
UFP Industries’ net sales are anticipated to have declined year over year in the fourth quarter, due to softer demand in retail, industrial and construction markets. Despite recent interest rate cuts by the Federal Reserve, the rise in mortgage rates is likely to have added pressure to consumer spending and reduced housing demand. Also, lumber market volatility and labor constraints are likely to have impacted the company’s top line, indicating lower selling prices.
For the to-be-reported quarter, UFPI expects demand to have declined, with retail demand down by mid-single digits and packaging demand likely to have decreased to mid to high-single digits. Construction demand is expected to have declined to a low-single digit. UFPI also expects lumber prices to have remained lower due to existing supply and demand dynamics.
Segment-wise, our model predicts a year-over-year decline in the net sales of Retail solutions (which accounted for 38.5% of net sales in third-quarter 2024) by 5.1%, Packaging (24.4% of net sales) by 8.8% and Construction (32.4% of net sales) by 3.9% to $480 million, $377.3 million and $491.1 million, respectively.
However, the company’s focus on long-term strategic plan, new product innovation and shareholders’ moves are commendable and are likely to have aided its fourth-quarter 2024 performance.
Margins
Meanwhile, from margins’ perspective, higher manufacturing costs, more competitive pricing, variable lumber prices, and higher labor and transportation expenses are expected to have weighed on the company’s bottom line. We expect the gross margin to have declined 180 bps to 17.6% year over year.
We predict earnings from operations for the Retail, Packaging and Construction segments to have declined 23.5% to $16.4 million, 70.3% to $12.7 million and 8.3% to $52.8 million, respectively, year over year.
What the Zacks Model Unveils for UFPI
Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The company does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings beat.
Earnings ESP of UFPI: UFP Industries currently has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
UFPI’s Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
Frontdoor, Inc. FTDR currently has an Earnings ESP of +60.00% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
FTDR’s earnings for the fourth quarter of 2024 are expected to decline 45%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 269%.
Trex Company, Inc. TREX has an Earnings ESP of +20.00% and a Zacks Rank of 2.
TREX reported better-than-expected earnings in each of the last four quarters, the average surprise being 9%. The company’s earnings for the fourth quarter of 2024 are expected to decrease 75%.
Watsco, Inc. WSO currently has an Earnings ESP of +0.94% and a Zacks Rank of 2.
WSO’s earnings for the fourth quarter of 2024 are expected to increase 3.4%. The company reported lower-than-expected earnings in each of the last four quarters, the negative average surprise being 10%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
