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Mar 31, 2020
Arcosa Q1 2020 Earnings Report
Arcosa's Q1 2020 results were announced, revealing revenue growth driven by organic expansion and the Cherry acquisition, alongside a business update addressing COVID-19's impact and withdrawn guidance.
Key Takeaways
Arcosa reported a 19% increase in revenues to $488.2 million and a net income of $31.6 million, with diluted EPS of $0.65. The company withdrew its 2020 guidance due to macroeconomic uncertainty from COVID-19.
Revenues increased 19% to $488.2 million.
Net income reached $31.6 million, with Diluted EPS of $0.65.
Adjusted EBITDA increased 29% to $75.6 million.
Operating cash flow was $41.5 million, and free cash flow was $20.4 million.
Arcosa
Arcosa
Arcosa Revenue by Segment
Revenue by Segment
Engineered Structures Revenue
CapyFin.comTransportation Products Revenue
CapyFin.com Forward Guidance
Arcosa withdrew its 2020 Revenue and Adjusted EBITDA guidance due to the macroeconomic uncertainty from COVID-19.
Positive Outlook
- Construction markets were robust throughout the first quarter, and construction activity has remained at healthy levels during the early part of the second quarter.
- The outlook remains intact for overall revenue growth in our combined wind towers and utility structures product lines, as the combined backlog provides solid visibility and utility structures demand continues to be robust.
- Activity in the small storage tanks product line is expected to remain relatively healthy.
- Our outlook for segment revenue and Adjusted EBITDA margin growth remains intact, as our barge backlog provides visibility for significant volume growth in 2020 versus 2019.
- Backlog businesses benefit from solid production visibility, and 2020 expectations for these businesses remain largely unchanged.
Challenges Ahead
- The outlook for the rest of 2020 will depend on the duration and magnitude of the COVID-19 economic slowdown and its impact on public and private construction activity in our key markets.
- The trench shoring products business, which represented 12% of segment revenues in 2019 (pro forma for Cherry), has experienced the largest demand declines in the segment, as customers have reduced capital expenditures during the downturn.
- Activity in the large storage tanks product line, which represented approximately 5% of segment revenues in 2019, is expected to be more heavily impacted by the oil and gas slowdown.
- Rail components revenues are expected to be lower in 2020 versus 2019. The cycle in railcar new builds had begun to turn lower prior to the COVID-19 slowdown.
- Macroeconomic uncertainty from COVID-19 and the unknown duration and impact of the slowdown.
Revenue & Expenses
Visualization of income flow from segment revenue to net income