Steel Markets
Gibraltar Q3 Results Squeezed by Labor Costs, Supply Chain Shortages
Written by David Schollaert
October 28, 2021
Gibraltar Industries Inc. reported net income of $27.9 million in its third quarter, down nearly 11.0% from the same period last year due to rising labor costs and supply-chain shortages, company executives said.
The Buffalo, N.Y.-based manufacturer and distributor of building products reported a 24.5% increase in revenue to $369.4 million during the period. Sales growth was driven by pricing and market demand in the renewable and infrastructure segments and participation gains in residential construction.
“Our team executed well and delivered solid results despite significant acceleration of inflation and supply-chain disruption that exceeded our expectations going into the quarter,” said Bill Bosway, Gibraltar’s president and CEO. “We remain confident that margins will begin to improve once inflation moderates and expand further as supply-chain disruptions become less impactful. Given strong fundamental demand drivers in our end markets, we expect today’s environment to have minimal impact on the long-term outlook for our portfolio businesses.”
Growth in the residential segment drove revenue increases of 13.1%, the sector’s fifth consecutive quarter of double-digit growth. The expansion was driven by solid demand amid seasonal strength despite the supply chain disruptions and surging material and transportation costs. The company expects inflation to moderate in the near term, however.
The industrial and infrastructure segment reported an 11.3% increase in Q3 revenue compared to the previous year. Revenue improved due to rising demand for both fabricated and nonfabricated product solutions. Gibraltar anticipates funding for state Department of Transportation, airport and other infrastructure projects to improve, accelerating its continued recovery. Order backlogs increased to $49 million in the third quarter, up 29% and driven by a surge of 66% in new orders.
Looking ahead to the fourth quarter, Gibraltar expects earnings per share growth of 21-39%, driven by “strong demand, slight moderation in steel inflation and more favorable alignment of pricing and throughput costs.” For FY2021, overall consolidated revenue is anticipated to range from $1.31 billion to $1.35 billion.
In all, the company offered a bullish near-term outlook, as they remain “well positioned with strong backlog, increasing customer orders, and a healthy balance sheet,” Bosway said.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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