Gibraltar Industries executives expected a tough first quarter. That's exactly what they got.
The Hamburg-based building products manufacturer's profits slid by 56 percent, while its sales slid by 13 percent, largely because of Gibraltar's sale of its U.S. bar grating business and European industrial and solar racking units. Its renewable energy and conservation business also was hurt by slumping sales.
The results were at the high end of Gibraltar's earnings guidance, but a penny less than analysts were expecting.
"We entered the quarter facing some headwinds," said Frank Heard, Gibraltar's president and CEO, during a conference call Friday.
Those headwinds are continuing to be felt in the current quarter, although the company expects a "strong" rebound in sales and earnings during the second half of this year.
"We expect a return to earnings growth during the third and fourth quarters," Heard said.
Gibraltar lowered its sales forecast for the full year to between $970 million and $980 million, a drop of between 2 percent and 3 percent from last year. The company reduced its earnings forecast to between $1.37 and $1.50 per share, down from its previous guidance of between $1.55 and $1.65 per share. Excluding one-time items, Gibraltar reduced its earnings forecast to $1.57 to $1.70 per share from its earlier guidance of $1.75 to $1.85 per share.
Gibraltar's profits during the first quarter fell to $4 million, or 12 cents per share, from $9 million, or 28 cents per share, a year ago. Excluding one-time items and the impact of the business sales, Gibraltar's profits fell by 36 percent to 20 cents per share from 32 cents per share a year earlier.
Gibraltar's sales fell to $207 million from $238 million as the business divestitures caused a 37 percent drop in industrial revenues, while softness in its renewable energy and conservation unit led to a 10 percent drop in sales. The bright spot was Gibraltar's residential products business, which accounts for about half of the company's revenues and had a 5 percent increase in sales, led by rising demand for its centralized mail and package locker products.
Gibraltar said it expects to earn between 35 cents and 40 cents per share during the second quarter, with sales between $249 million and $254 million. Excluding one-time items, Gibraltar said it expects to earn between 37 cents and 42 cents per share.