Electric utilities firm Stella-Jones' Q2 sales miss expectations
Overview
Stella-Jones Q2 sales down 1%, missing analyst expectations, per LSEG data
Co maintains strong EBITDA margin despite lower sales volumes
Completed Locweld acquisition, expanding infrastructure offerings
Outlook
Stella-Jones updates 2025 sales outlook to C$3.5 bln from C$3.6 bln
Company expects above 17% EBITDA margin in 2025
Stella-Jones sees low single-digit growth in utility poles for 2025
Company anticipates modest decline in railway ties sales for 2025
Result Drivers
UTILITY POLES - Sales increased due to new customer volumes but were offset by lower pricing and overall volume decline
RAILWAY TIES - Sales decreased due to a major customer's shift to in-house treatment and project delays
LOCWELD ACQUISITION - Acquisition contributed positively to sales, expanding infrastructure offerings
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | C$1.03 bln | C$1.07 bln (8 Analysts) |
Q2 Net Income |
| C$106 mln |
|
Q2 Gross Margin |
| 19.9% |
|
Q2 EBITDA |
| C$189 mln |
|
Q2 EBITDA Margin |
| 18.3% |
|
Q2 Gross Profit |
| C$206 mln |
|
Q2 Operating Income |
| C$155 mln |
|
Q2 Operating Margin |
| 15.0% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the forest & wood products peer group is "buy"
Wall Street's median 12-month price target for Stella-Jones Inc is C$90.00, about 12.8% above its August 6 closing price of C$78.49
The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago
Press Release: ID:nGNX72tkYs
