Gibraltar Industries' fourth-quarter profits easily topped analyst expectations as earnings from the Hamburg-based company's building products business more than tripled.
While Gibraltar's overall profits fell by 45 percent because of $11.4 million in debt- and acquisition-related charges, the growth from the building products business allowed the company's earnings from its continuing operations to come in far stronger than expected.
Gibraltar's profits slid to $5.4 million, or 18 cents per share, from $9.8 million, or 33 cents per share, a year ago. But all of that drop was due to a series of one-time charges that slashed what otherwise would have been a 32 percent jump in its earnings from continuing operations to $12.4 million, or 41 cents per share.
That was well above the company's reduced forecast from October that its fourth-quarter profits would range between 30 cents and 35 cents per share.
"The fourth quarter was a very good one," said David Kay, Gibraltar's chief financial officer.
Company officials said Thursday they expect Gibraltar's profits to continue rising during the current quarter, ranging between 40 cents and 45 cents per share, at the low end of analyst forecasts that now average 45 cents, according to Thomson Financial/First Call.
All of the improvement in Gibraltar's fourth-quarter operating profits came from its fast-growing building products business, which was bolstered by the acquisition of commercial building products maker Amico last September.
Earnings from the building products business more than tripled to $25.4 million, while sales surged by 76 percent to $204 million. While the acquisition of Amico and two other companies accounted for most of the sales growth, revenue from Gibraltar's core building products business improved by 10 percent during the quarter, said Henning Kornbrekke, the company's president and chief operating officer.
Operating profits plunged by 71 percent to $3.5 million at Gibraltar's processed metal products business as revenues fell by 9 percent. Earnings from its thermal processing business dropped by 19 percent, despite a 2 percent increase in sales.
Buoyed by four acquisitions during the last four months of 2005, Gibraltar topped the $1 billion mark in annual sales for the first time last year as revenues hit $1.18 billion.
As the company's operations expand and its customer base grows, Brian J. Lipke, Gibraltar's chairman and chief executive officer, said he believes the firm has the potential to add as much as $600 million in sales by selling more of its products to its existing customer base.