Builders FirstSource Falls Over 17% After Q1 Earnings - What's Going On?

Builders FirstSource, Inc. BLDR shares are trading lower following the first quarter earnings result.

The company reported adjusted earnings per share of $2.65, beating the analyst consensus of $2.30. 

The company reported quarterly sales of $3.891 billion, beating the street view of $3.824 billion.

Sales rose 0.2%, with core organic sales essentially flat, in line with expectations, and growth from acquisitions partially offset by commodity deflation.

Gross profit was $1.3 billion, a decrease of 5.2% compared to the prior year period.

Gross profit margin percentage decreased 190 basis points to 33.4%, primarily driven by a timing shift in product mix toward lower-margin, early stage homebuilding products and margin normalization, particularly in Multi-Family.

Adjusted EBITDA decreased 14.4% to $540.9 million, primarily driven by lower gross profit and higher operating expenses due to acquisitions. Adjusted EBITDA margin declined by 240 basis points to 13.9%.

Cash provided by operating activities was $317.2 million, down $337.2 million compared to the prior year period.

For the first quarter, the company delivered approximately $40 million in productivity savings related to operations excellence and supply chain initiatives.

Outlook: Builders FirstSource reiterates 2024 net sales of $17.5 billion-$18.5 billion versus $17.98 billion estimate.

The company expects adjusted EBITDA margin to be in a range of 14.0% to 15.0%.

Price Action: BLDR shares are trading lower by 17.3% to $166.19 at last check Tuesday. 

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