Construction Partners' Q2 Earnings Beat Estimates, FY25 View Up

Construction Partners, Inc. ROAD or CPI reported solid second-quarter fiscal 2025 (ended March 31, 2025) results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis.

Following the results, the company’s shares have gained 3.6% on Friday.

The company’s quarterly results reflected a strong operational performance despite seasonal challenges. Shorter days and colder weather typically impacted construction, but ROAD maintained steady progress across its businesses.

Project backlog reached a record level, supported by increased project wins across the Sunbelt region. The company is positioned to advance this backlog in the second half of the fiscal year, helped by stable federal and state funding and ongoing commercial activity. Owing to strong industry demand and favorable funding trends, the company raised its fiscal 2025 outlook.

Inside CPI’s Q2 Numbers

CPI reported adjusted earnings per share of 8 cents in contrast to the Zacks Consensus Estimate of a loss per share of 4 cents. The bottom line also improved from an adjusted loss per share of 2 cents reported in the year-ago quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Quarterly revenues of $571.7 million surpassed the consensus mark of $540 million by 5.9% and grew 54% year over year.

Construction Partners, Inc. Price, Consensus and EPS Surprise

Construction Partners, Inc. price-consensus-eps-surprise-chart | Construction Partners, Inc. Quote

The project backlog at March 31, 2025, amounted to $2.84 billion, up from the year-ago number of $1.79 billion and $2.66 billion at Dec. 31, 2024.

ROAD’s Operating Highlights

The company reported gross profit of $71.4 million, up 84% from $38.8 million in the year-ago period. General and administrative expenses, as a percentage of total revenues, were 8.2%, down 150 basis points (bps) from 9.7% year over year.

Adjusted EBITDA of $69.3 million increased 135% year over year. Adjusted EBITDA margin increased 420 bps year over year to 12.1%.

CPI’s Financials

As of March 31, 2025, ROAD had cash and cash equivalents of $101.9 million, up from $74.7 million reported at the fiscal 2024-end. As of the second quarter of fiscal 2025, long-term debt (net of current maturities and deferred debt issuance costs) was $1.32 billion, up from $487 million at fiscal 2024-end.

For the first six months of fiscal 2025, net cash provided by operating activities (net of acquisitions) was $96.3 million compared with $78.6 million a year ago.

ROAD’s Fiscal 2025 Guidance Raised

For fiscal 2025, CPI now expects revenues in the range of $2.77-$2.83 billion, up from the prior projection of $2.66-$2.74 billion. This indicates an improvement from $1.82 billion reported in fiscal 2024.

Adjusted net income is expected to be in the range of $122.5-$133.5 million, up from the prior projection of $109.5-$122.1 million.

CPI now anticipates adjusted EBITDA in the range of $410-$430 million (up from the prior projection of $375-$400 million) compared with $220.6 million in fiscal 2024.

Adjusted EBITDA margin is anticipated to be between 14.8% and 15.2% (up from the prior projection of 14.1%-14.6%) compared with $12.1% in fiscal 2024.

CPI's Zacks Rank & Recent Construction Releases

CPI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

TopBuild Corp. BLD reported mixed results for the first quarter of 2025, wherein its adjusted earnings topped the Zacks Consensus Estimate and the net sales missed the same. Year over year, both metrics declined.

The quarterly performance reflects lower sales volume in the Installation segment, mainly due to softened housing demand caused by affordability concerns. Also, increased SG&A expenses and the lingering inflation added to the performance decline. However, strength in the Specialty Distribution segment somewhat offset the downward trend during the quarter. TopBuild remains optimistic about its opportunities in the maintenance and repair needs in the commercial and industrial sectors, along with the long-term growth expectations in the residential market.

Boise Cascade Company BCC reported mixed first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and sales topping the same. On a year-over-year basis, both top and bottom lines declined.

The company's quarterly performance was mainly marred by lower selling prices and sales volumes across the products it manufactures and distributes. Operations were also impacted by weak demand, unfavorable weather and scheduled downtime at the Oakdale mill. Going forward, Boise Cascade plans to stay flexible as market conditions evolve through the second quarter. A strong balance sheet supports continued investments aligned with long-term trends in residential construction.

Louisiana-Pacific Corporation’s LPX, or LP, reported better-than-expected first-quarter 2025 results, with adjusted earnings and net sales beating the Zacks Consensus Estimate. On a year-over-year basis, the bottom line declined while the top line remained flat.

The quarter’s performance reflects strength in the company’s Siding business, mainly backed by ExpertFinish growth, share gains in new residential construction and improving shed market. This growth was partially offset by soft contributions from the Oriented Strand Board segment. Despite uncertainties surrounding the new tariff regime and an inflationary market scenario, Louisiana-Pacific is well-positioned for 2025. Backed by its in-house abilities, strategic focus on higher-margin products and its position across the diverse end markets, LPX aims to navigate through the market risks.

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This article originally published on Zacks Investment Research (zacks.com).

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