Builders FirstSource raises 2024 gross margin forecast on lower capital expenses (updated)

Builders Firstsource

05/11/2024 15:46

(Recasts paragraph 1, adds shares in paragraph 2, adds details
from release throughout)
       Nov 5 (Reuters) - Building products supplier Builders
FirstSource Inc  BLDR.N  on Tuesday raised its forecast for
full-year gross profit margin and free cash flow, despite
weakness in sales, in anticipation of lower capital expenses
than previously estimated. 
    Shares of the company rose more than 6% in morning trade. 
    The company, which provides building materials and
components to homebuilders and developers, has been seeing sales
weakness for months, with higher borrowing costs leading to a
decline in construction of apartments in the U.S. this year.
    Within its geographies, the company expects multifamily
starts to be down by 25% to 30% in 2024. 
    Builders FirstSource cut its full-year net sales forecast
range to $16.25 billion to $16.55 billion, from a prior range of
$16.4 billion to $17.2 billion.
    Nonetheless, the Irving, Texas based company expects higher
full-year gross profit margins, now in the range of 32% to 33%,
up from its prior outlook of 31.5% to 32.5%.
        It also expects free cash flow to be marginally higher. 
        Builders FirstSource reported third-quarter adjusted
earnings per share of $3.07, down from $4.24 per share last
year, but above analysts' average estimate of $2.98 per share,
according to data compiled by LSEG. 

 (Reporting by Ananta Agarwal and Rupali Chaudhary in Bengaluru;
Editing by Krishna Chandra Eluri and Shailesh Kuber)
 ((Rupali.Chaudhary@thomsonreuters.com;))