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Apr 01, 2023
Insteel Q2 2023 Earnings Report
Insteel Industries' financial performance decreased due to narrower spreads between selling prices and raw material costs, lower shipments, and higher manufacturing costs.
Key Takeaways
Insteel Industries reported a decrease in net earnings for Q2 2023 to $5.1 million, or $0.26 per share, compared to $39.0 million, or $1.99 per diluted share, in the same period last year. Net sales also decreased by 25.4% to $159.1 million. The decrease was attributed to customer destocking activities and usual winter weather conditions.
Net earnings decreased to $5.1 million, or $0.26 per share, from $39.0 million, or $1.99 per diluted share, in the prior year quarter.
Net sales decreased 25.4% to $159.1 million from $213.2 million in the prior year quarter.
Average selling prices decreased 14.5% and shipments declined by 12.8%.
Gross profit decreased to $13.3 million from $57.1 million in the prior quarter, and gross margin narrowed to 8.3% from 26.8%.
Insteel
Insteel
Forward Guidance
Insteel expects shipment volumes and margins to improve in the second half of fiscal year 2023, with strong activity in private nonresidential construction markets and indications of a recovering housing market. They anticipate federal spending to stimulate demand in infrastructure markets over the coming months and expect contributions from recent capital projects to increase over the remainder of the year.
Positive Outlook
- Expects shipment volumes and margins to improve in the second half of fiscal year 2023.
- Sees strong activity in private nonresidential construction markets.
- Notes indications that the housing market is recovering.
- Anticipates federal spending to stimulate demand in infrastructure markets.
- Expects increasing contributions from recent capital projects.
Challenges Ahead
- Experienced a sharp downward reset in steel prices.
- Faced concerted customer destocking activities.
- There has been little tangible impact on the business from the Infrastructure Investment and Jobs Act up to this point.
- The sharp downward reset in steel prices was painful for Insteel
- Concerted customer destocking activities, was painful for Insteel