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Dec 31, 2019
Boise Cascade Q4 2019 Earnings Report
Boise Cascade reported stronger than expected financial performance due to favorable weather and solid homebuilder activity.
Key Takeaways
Boise Cascade reported Q4 net income of $14.6 million, or $0.37 per share, on sales of $1.1 billion. The company's performance was driven by favorable weather conditions that allowed homebuilders to maintain solid activity levels, leading to increased product demand.
Total U.S. housing starts increased 20% compared to the same period last year.
Single-family starts increased 15%, driving sales volumes.
BMD's sales increased 7% due to a sales volume increase of 11%.
Company expects to record approximately $18 million of charges during first quarter 2020.
Forward Guidance
The February 2020 Blue Chip consensus forecast for 2020 and 2021 reflects 1.34 million and 1.35 million total U.S. housing starts, respectively, compared with actual housing starts of 1.29 million in 2019. Commodity wood product pricing during 2020 will be a key driver of our financial results and will be dependent on industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns.
Positive Outlook
- U.S. demographics are supportive of higher levels of housing starts.
- Household formation rates will be a key factor behind the demand for new construction.
- Company will continue to manage our production levels to our sales demand.
Challenges Ahead
- Constraints faced by builders, such as availability of labor and building lots, as well as affordability constraints faced by prospective buyers, may limit residential construction growth.
- The pace of household formation rates and residential repair-and-remodeling activity will be affected by employment growth, wage growth, prospective home buyers' access to and cost of financing, housing affordability, and consumer confidence, as well as other factors.
- The size of new single-family residences as well as the mix of single and multi-family starts will influence product consumption.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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