Steel Markets
Gibraltar Discusses Market Opportunities
Written by Sandy Williams
May 9, 2015
Gibraltar Industries, a leading manufacturer and distributor of products for building markets, saw revenues decrease in Q1 2015 in the industrial and infrastructure product segments. Low oil prices have dampened spending in the oil and gas markets and the strong US dollar has impacted order rates and revenues. Historically, approximately 25-20 percent of revenues for Gibraltar are derived from the oil and gas industries and orders are expected to be down for the balance of the year. Guidance for industrial and infrastructure was accordingly revised downward.
The oil and gas downturn in oil and gas end markets was not a surprise to Gibraltar said CEO Frank Heard during the company earnings call. “We don’t expect to see another step down in end market activity in that and we think we’re running across the bottom of the trough,” said Heard.
Despite headwinds in several sectors, Gibraltar executives gave examples of growth opportunities they see for the company in construction markets for the coming quarters.
Gibraltar is bullish on long-term opportunities in the transportation market.
“The current U.S. transportation funding runs out in 24 days and new order rates thus far have been shorter in duration and smaller in terms of dollar size.” said CFO Kenneth Smith during the earnings conference call. “Despite the uncertainty in future government funding, this segment’s backlog increased this quarter, boosted by orders for roadway seals for maintenance projects plus a noteworthy project that will use isolation bearings for a non-traditional application in offshore oil production. “
End markets in residential products remain favorable driven by postal authority initiatives that are transforming from mail delivered door-to-door to being delivered through centralized mail receptacles.
Another strong end market in residential is ventilation products, with a focus on sealing the envelope of the house to achieve a zero carbon footprint home.
Bridge repair and replacement offers opportunities in infrastructure with 33 percent of bridges in the U.S. structurally deficient or obsolete.
Water management opportunities include solutions for current and decaying infrastructure and management and harvesting rainwater for residential markets.
Green roof transformation for high-rise and commercial buildings is growing with 5 million square feet of U.S. roofing space converted in 2013. In the residential market the trend of extending living space to backyards is providing growth opportunities for construction and associated products.
Sandy Williams
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