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Why Construction Partners Shares Are Falling Today

By Akanksha Bakshi
  • Construction Partners Inc (NASDAQ:ROAD) reported second-quarter FY22 revenue growth of 35.9% year-over-year to $243.4 million, beating the consensus of $217.66 million.
  • EPS loss widened to $(0.18) from $(0.10) in 2Q21, missing the consensus of $(0.05).
  • The gross margin contracted by 496 bps to 5.1%. The operating loss widened to $(11.49) million from $(6.39) million in 2Q21.  
  • Adjusted EBITDA declined 28.9% Y/Y to $7.82 million, and margin contracted by 293 bps to 3.1%.
  • Construction Partners' net cash provided by operating activities, net of acquisitions, YTD was $3.3 million, compared to $2.4 million a year ago.
  • The company's project backlog was $1.28 billion at March 31, 2022, compared to $1.09 billion at December 31, 2021, and $773.3 million at March 31, 2021.
  • "During the quarter, we experienced an unprecedented inflationary cost environment that negatively impacted profitability, primarily due to the rapid increase in energy costs driven largely by the invasion of Ukraine. We have taken immediate action in response by raising equipment rates used in bids to cover the new market prices of diesel and other fuels, we are incorporating additional contingencies into project bids, and we have begun implementing diesel fuel index mechanisms with customers and suppliers where possible," commented CEO Fred J. (Jule) Smith.
  • FY22 Outlook: Construction Partners expects revenue of $1.15 billion - $1.20 billion (prior expectation $1.075 billion - $1.150 billion) versus the consensus of $1.14 billion.
  • The company expects net income of $14.5 million - $25.3 million (prior $34.7 million - $41.8 million), Adjusted EBITDA of $105.0 million - $120.3 million (prior $122 million - $132 million).
  • The company has updated its FY22 guidance to reflect the strong project demand environment and the continued inflation and elevated energy costs that will persist during the year.
  • Price Action: ROAD shares traded lower by 9.85% at $23.62 on the last check Friday.
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Dive Deeper:
Why Hain Celestial Shares Are Plunging Today
Hain Celestial Group Inc (NASDAQ:HAIN) reported third-quarter FY22 sales growth of 2.1% year-on-year to $502.94 million, missing the consensus of $521.54 million. Net…
Why CommScope Shares Are Surging Today
CommScope Holding Company, Inc (NASDAQ:COMM) reported first-quarter FY22 net sales growth of 7.6% year-on-year to $2.23 billion, beating the consensus of $2.08 billion.…
Why Wayfair Shares Are Plunging Today
Wayfair Inc (NYSE:W) reported a first-quarter FY22 sales decline of 13.9% year-on-year to $2.993 billion, marginally missing the consensus of $3.00 billion. International…
Why Gannett Shares Are Sliding Today
Gannett Co Inc (NYSE:GCI) reported a first-quarter FY22 sales decline of 3.7% year-on-year to $748.08 billion, missing the consensus of $754.90 million. Same-store…
One subscription that gives you access to news from hundreds of sites
Why Crocs Shares Are Surging Today
Crocs Inc (NASDAQ:CROX) reported first-quarter FY22 sales growth of 43.5% year-on-year, to $660.15 million, beating the consensus of $621.88 million. Wholesale revenue grew…
Why Under Armour Shares Are Plunging Today
Under Armour Inc (NYSE:UAA) (NYSE:UA) reported sales growth of 3% year-on-year to $1.30 billion for its transition quarter ended March 31, 2022, missing…
Get all your news in one place