Boise Cascade Q2 2022 Earnings Report
Key Takeaways
Boise Cascade Company reported net income of $218.1 million, or $5.49 per share, on sales of $2.3 billion for the second quarter ended June 30, 2022, compared with net income of $302.6 million, or $7.62 per share, on sales of $2.4 billion for the second quarter ended June 30, 2021.
Completed the acquisition of Coastal Plywood Company.
Economic uncertainty and expectations of softening demand for new residential construction are a reality.
Balance sheet remains strong and flexible.
Confident in ability to effectively adjust to the economic landscape ahead while still executing upon organic growth plans.
Boise Cascade
Boise Cascade
Boise Cascade Revenue by Segment
Forward Guidance
The company expects the pace of new residential construction in second half of 2022 to slow due to home affordability constraints and a weakening economy.
Positive Outlook
- Consensus forecasts for 2022 single- and multi-family housing starts in the U.S are around 1.6 million units, or essentially flat compared to 2021.
- Current U.S. demographics and limited new and existing home inventory support this level of housing starts.
- The age of U.S. housing stock and elevated levels of homeowner equity provide a favorable backdrop for repair-and-remodel spending.
- The primary drivers of repair-and-remodeling activity to continue to be supportive of homeowners' further investment in their residences.
Challenges Ahead
- Recent monetary policy shifts to increase interest rates to combat high levels of inflation have significantly increased mortgage rates and created a great deal of uncertainty broadly across the U.S. economy.
- Expect the pace of new residential construction in second half of 2022 to slow due to home affordability constraints and a weakening economy.
- As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs.
- We expect future commodity product pricing and commodity input costs to be volatile in response to economic uncertainties, industry operating rates, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns.
- EWP and general line products have historically experienced limited price volatility, but are also subject to price erosion as economic activity slows.
Revenue & Expenses
Visualization of income flow from segment revenue to net income