Headwaters Earnings: These Numbers Disappoint Investors

Headwaters Incorporated (NYSE:HW) reported its results for the fourth quarter. Headwaters provides products, technologies and services in three industries: light building products, heavy construction materials and energy technology.

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Headwaters Incorporated Earnings Cheat Sheet

Results: Loss narrowed to $4.9 million (loss of 5 cents per diluted share) from $46.7 million (loss of 5 cents per share) in the same quarter a year earlier.

Revenue: Rose 6.6% to $190.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Headwaters Incorporated fell short of the mean analyst estimate of 8 cents per share. It beat the average revenue estimate of $113.1 million.

Quoting Management: “We continued to see revenue growth in the fourth quarter, driven primarily by improvements in new residential construction and market share gains,” said Kirk A. Benson, Chairman and Chief Executive Officer of Headwaters. “We maintained exceptional operating leverage with contribution margins in excess of 47%, greatly expanding operating income in an up market. For the quarter, operating income grew by 120% to $15.9 million.”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by one cent, and in the second quarter, it was ahead by one cent.

Looking Forward: Analysts seem more negative about the company’s results for the next quarter than two months ago. The average estimate for the first quarter of the next fiscal year has moved from a loss of 2 cents a share to a loss of 4 cents over the last sixty days. The average estimate for the fiscal year is currently a loss of 41 cents per share, down from a loss of 40 cents sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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