Headwaters Inc. Earnings Cheat Sheet: Beat Expectations Although Loss Widens

Despite reporting a loss in the third quarter, Headwaters Incorporated (NYSE:HW) can hang its hat on beating Wall Street’s expectations. 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 for the Third Quarter

Results: Reported a loss of $46.7 million (72 cents per diluted share) in the quarter. The conglomerate had net loss of $24.1 million or 40 cents per share in the year earlier quarter.

Revenue: Rose 0.1% to $178 million from the year earlier quarter.

Actual vs. Wall St. Expectations: HW reported adjusted net income of 14 cents per share. By that measure, the company beat the mean estimate of 5 cents per share. It fell short of the average revenue estimate of $191.2 million.

Quoting Management: “Two major accomplishments stand out in Fiscal 2011. First, we successfully refinanced our senior debt, extending the maturity to 2019, reducing the interest rate from 11.375% to just 7.625%, lowering our cash interest expense and increasing free cash flow. The refinancing greatly reduced Headwaters’ financial risk and positions us to focus on reduction of our subordinated debt,” said Kirk A. Benson, Chairman and Chief Executive Officer of Headwaters. “In that regard, we paid down $24.4 million of our high coupon subordinated debt. In 2012, we expect to further reduce our debt through improved cash flow and with the proceeds from our anticipated sale of non-core assets.”

Key Stats:

The company beat estimates last quarter after falling short in the previous two quarters. In the second quarter, it missed the mark by 9 cents, and in the first quarter, it fell short by 12 cents.

Looking Forward: The average estimate for the fourth quarter remains unchanged at 13 cents a share. Down from a loss of 77 cents per share ninety days ago, the average estimate for the fiscal year is now a loss of 87 cents.

Competitors to Watch: PGT, Inc. (NASDAQ:PGTI), NCI Building Systems, Inc. (NYSE:NCS), Apogee Enterprises, Inc. (NASDAQ:APOG), Armstrong World Industries, Inc. (NYSE:AWI), Owens Corning (NYSE:OC), Titon Holdings plc (TON), Griffon Corporation (NYSE:GFF), Patrick Industries, Inc. (NASDAQ:PATK), and Nam Lee Pressed Metal Industries Ltd. (G0I).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)