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Apr 30, 2022
Quanex Q2 2022 Earnings Report
Reported record revenue and earnings driven by strong revenue growth across all operating segments.
Key Takeaways
Quanex Building Products reported a record quarter with net sales of $322.9 million, a 19.4% increase compared to the same period in 2021. The growth was attributed to higher prices related to the pass-through of raw material cost inflation.
Reported a record quarter despite ongoing challenges related to inflation and the supply chain.
Demand for products was better than expected, and the company started to see the benefit of its pass-through pricing strategy.
Inflationary pressures are ongoing, but the company expects further margin expansion in the second half of the fiscal year.
Balance sheet and liquidity remain strong, with a focus on generating cash, paying down debt, and opportunistically repurchasing stock.
Forward Guidance
Quanex is increasing guidance for fiscal 2022 based on strong second-quarter results combined with the successful implementation of the pass-through pricing strategy. Net sales are estimated to be $1.18 billion to $1.2 billion, which is expected to generate approximately $150 million to $155 million in Adjusted EBITDA in fiscal 2022.
Positive Outlook
- Low double-digit revenue growth is expected in the North American Fenestration segment.
- Mid-single-digit revenue growth is expected in the North American Cabinet Components segment.
- Mid-single-digit revenue growth is expected in the European Fenestration segment.
- Underlying fundamentals for residential housing are positive.
- Demand for products remains healthy.
Challenges Ahead
- Current macro-related uncertainties.
- Ongoing inflation.
- Supply chain challenges.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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