Eagle Materials Q2 Revenue Hits Record as EPS Falls 14%

Eagle Materials Inc. (NYSE: EXP) reported record fiscal second-quarter 2027 revenue as higher cement, gypsum wallboard and recycled paperboard volumes offset pricing pressure and rising operating costs. Revenue increased 2% to $653 million, but diluted earnings per share fell 14% to $3.63 from $4.23 as lower wallboard pricing and higher freight and raw-material expenses weighed on profitability.

The building-materials producer recorded a gross profit margin of 26.7% and generated $210 million in operating cash flow during the quarter. Eagle Materials returned approximately $70 million to shareholders, including about $62 million used to repurchase 304,881 shares and its quarterly dividend payment. The reduced share count partly offset the pressure on per-share earnings.

Cement volumes rise as costs pressure earnings

Heavy Materials revenue, including cement, concrete and aggregates, cement intersegment revenue and the company’s proportionate share of its joint venture, rose to $478 million from $467 million a year earlier. Operating earnings declined to $113 million from $128 million.

Cement sales volume was slightly higher and reached a second-quarter record, while net cement sales prices decreased slightly. Higher freight costs, reflecting elevated diesel prices, and increased raw-material costs contributed to the decline in segment earnings.

Management maintained a favorable outlook for cement demand, citing healthy state and federal infrastructure budgets and elevated private nonresidential construction activity. The company said about 40% of Infrastructure Investment and Jobs Act funding remains to be spent, supporting public infrastructure expenditure over multiple years.

Wallboard pricing offsets volume growth

Light Materials revenue increased to $216 million from $213 million, but operating earnings fell to $68 million from $78 million. Gypsum wallboard sales volume rose 7%, while net sales prices declined 10%, making pricing the principal constraint on the segment’s quarterly performance.

Eagle Materials said new single-family residential construction remains challenged by housing-affordability pressures. Its longer-term view remains positive because of significant housing underbuilding, while its production footprint is concentrated in the U.S. Heartland and Sunbelt. The company also said its low-cost structure and current capital investments provide advantages in an uncertain near-term demand environment.

Capital spending reduces free cash flow

For the six months ended September 30, 2026, operating cash flow increased 7% to $364 million from $341 million. Net capital expenditure rose to $250 million from $185 million, reducing free cash flow to $115 million from $156 million. Eagle Materials paid $16 million in dividends and spent $146 million on share repurchases during the six-month period.

Net debt stood at $1.48 billion at September 30, compared with $1.53 billion at March 31. The company’s non-GAAP net debt-to-adjusted EBITDA ratio declined to 1.9 times from 2.1 times, while net debt-to-capital remained at 50%. Trailing-12-month adjusted EBITDA was $774 million, up from $719 million for the fiscal year ended March 31, 2026.

The modernization and expansion of Eagle Materials’ Laramie, Wyoming, cement plant remained on schedule for completion by the end of calendar 2026. The upgrade of its Duke, Oklahoma, wallboard plant was on track for construction completion in the second half of calendar 2027.

Key uncertainties include cyclical and seasonal construction demand, housing affordability, infrastructure spending, commodity pricing, energy and transportation costs, adverse weather, supply-chain interruptions and execution risks associated with expansion projects. The company also identified interest rates, tariffs, regulation and potential increases in cement and wallboard industry capacity as factors that could affect future results.