NCI Building Systems CEO: “optimistic” about FY08 profit growth
NCI Building Systems, Inc. (NYSE: NCS) CEO Norman Chambers said the maker of metal products for the nonresidential construction industry is “cautiously optimistic” about earnings growth during fiscal 2008. Chambers made the comments during a midday conference call.
“Our cautious optimism in the face of potentially damaging macroeconomic conditions is based on continuing to improve our operating efficiencies largely through technical systems, process improvements and improving our supply chain management,” Chambers said. “We will focus on growing external revenue but not at the expense of margins. Commercial discipline in this uncertain market will be critical to growing our [earnings].”
For the first half of fiscal 2008 ending in April, the company expects earnings in the range of $0.90 to $1.05 per share, compared with $0.80 per share during the first half of fiscal 2007.
For the entire fiscal 2008, NCI predicts earnings of between $3.35 and $3.70 per share, compared with $3.45 per share in fiscal 2007. Analysts expect earnings of $4.18 per share.
Chambers said the guidance assumes that low-rise, nonresidential construction will continue to decline, by about 6% during calendar 2008.
After Monday’s closing bell, NCI posted fourth-quarter sales of $463.4 million, compared with $498.5 million a year earlier. Analysts predicted $524 million. The Houston-based firm’s quarterly net income declined 9% to $25.4 million, or $1.27 per share, from $28 million, or $1.33 per share, during the same period of 2006. Wall Street analysts expected earnings of $1.59 per share.
“The revenue was lower than our forecasted guidance,” Chambers said.
He said soft market conditions in the small buildings segment hurt the company’s revenue results.
For the three months ended late October, NCI Building Systems’ gross profit fell to $119.9 million, from $121.7 million. Selling, general and administrative expenses during the fourth quarter rose to $72.3 million, from $70.5 million.
Plant utilization during fiscal 2007 was 70%, compared to 75% during fiscal 2006.
In afternoon trading, NCS shares are down 19.03%, or $6.81, at $28.97. Over the last 52 weeks, shares have ranged from $28.97 to $60.61.
