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Mar 31, 2023
Arcosa Q1 2023 Earnings Report
Arcosa's Q1 2023 earnings were announced, featuring record quarterly adjusted EBITDA supported by broad-based outperformance and margin expansion in all three segments.
Key Takeaways
Arcosa reported strong Q1 2023 results, driven by contributions from all businesses. Adjusted EBITDA increased by more than 45%, reflecting positive momentum in growth businesses and solid execution in cyclical businesses. The company increased its full-year revenue and Adjusted EBITDA guidance.
Arcosa generated record results in the first quarter, with Adjusted EBITDA increasing more than 45 percent.
Construction Products led performance, with Adjusted Segment EBITDA expanding by 85 percent.
Received approximately $800 million in new wind tower orders during the quarter, and over $1.1 billion since the passage of the Inflation Reduction Act.
Received $122 million of orders in barge business, representing a book to bill of 1.8 in the first quarter.
Arcosa
Arcosa
Arcosa Revenue by Segment
Revenue by Segment
Engineered Structures Revenue
CapyFin.comTransportation Products Revenue
CapyFin.com Forward Guidance
Arcosa increased its full year 2023 guidance.
Positive Outlook
- Increased its revenue guidance range to $2.2 billion to $2.3 billion, from its prior range of $2.15 billion to $2.25 billion.
- Increased its Adjusted EBITDA guidance range to $345 million to $370 million, from its prior guidance range of $310 million to $340 million.
- Included in the revised Adjusted EBITDA guidance range is the anticipated net benefit from the Advanced Manufacturing Production ("AMP") tax credits provided for in the Inflation Reduction Act (“IRA”) for full year 2023 of approximately $17 million to $22 million for wind towers produced and sold during the year.
- Recognized a net benefit from the AMP tax credits of $3.2 million in the first quarter.
- The credit is fully refundable regardless of an entity’s tax position, the Company has accrued for the tax credit as a reduction in cost of revenues.
Challenges Ahead
- Certain provisions of the IRA, including the AMP tax credits for wind towers, remain subject to the issuance of additional guidance and clarification.
- Volumes for natural aggregates declined due to the deceleration of new single-family residential construction activity and from adverse weather in certain markets.
- Inflationary cost pressures related to higher diesel, cement, and process fuels increased cost of revenues by approximately $5 million, or 3%.
- Results for the Engineered Structures segment were impacted by the divestiture of the storage tanks business.
- Elevated steel prices remain a demand headwind.
Revenue & Expenses
Visualization of income flow from segment revenue to net income