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Jun 30, 2020
Arcosa Q2 2020 Earnings Report
Arcosa's Q2 2020 results were announced, highlighting double-digit increases in revenues and Adjusted EBITDA driven by barge recovery, strong utility structures demand, and the Cherry acquisition.
Key Takeaways
Arcosa reported a strong second quarter with a 15% increase in revenues, driven by growth in all three segments. The Cherry acquisition exceeded expectations, and the company generated strong cash flow, reducing net debt/EBITDA to 0.4X. Demand for utility structures remained healthy, while new orders in barge and rail components were weak.
Revenues increased 15% to $498.5 million.
Net income increased 11% to $33.3 million, with diluted EPS of $0.68.
Adjusted EBITDA increased 23% to $78.7 million.
Free cash flow was $56.3 million, representing a 170% conversion rate.
Arcosa
Arcosa
Arcosa Revenue by Segment
Revenue by Segment
Engineered Structures Revenue
CapyFin.comTransportation Products Revenue
CapyFin.com Forward Guidance
The path to sustained economic recovery remains uncertain, and order and inquiry activity during the second quarter was mixed. Demand for utility structures continued to be very healthy and lead times remain extended, and wind tower inquiries are progressing for 2021 production. On the other hand, new orders in barge and rail components were weak, as customers reduced capital spending in the midst of lower equipment utilization.
Positive Outlook
- Demand for utility structures continued to be very healthy.
- Lead times for utility structures remain extended.
- Wind tower inquiries are progressing for 2021 production.
- Strong cash flow and low leverage provide flexibility for continued investment in growth strategy.
- Expect growth and cost synergies from recent acquisitions in utility structures business.
Challenges Ahead
- The path to sustained economic recovery remains uncertain.
- Order and inquiry activity during the second quarter was mixed.
- New orders in barge and rail components were weak.
- Customers reduced capital spending due to lower equipment utilization.
- Continued monitoring of federal and state transportation budgets is necessary to determine the impact on future construction spending.
Revenue & Expenses
Visualization of income flow from segment revenue to net income