Key Points – Insteel’s Q3 earnings fell sharply to $9 million, or $0.46 per share, from $15.2 million a year ago as higher raw material, freight and manufacturing costs outweighed modest shipment growth and higher selling prices. – Demand remains mixed: infrastructure activity…
ayed reasonably strong, while private non-residential construction was weak and some data center-related shipments were delayed by weather and customer scheduling issues rather than cancelled. – The company remains financially solid with $22.9 million in cash, no borrowings on its credit facility, and continued share buybacks, while management is also pushing through another price increase to help offset persistent inflationary pressure. Insteel Industries (NYSE:IIIN) reported lower fiscal third-quarter earnings as higher selling prices and modestly improved shipments were outweighed by rising raw material, freight and manufacturing costs, executives said on the company’s earnings call
Scot Jafroodi, vice president, chief financial officer and treasurer, said net earnings fell to $9 million, or $0.46 per share, from $15.2 million, or $0.78 per share, in the prior-year quarter. He said third-quarter shipments increased 1.7% year over year, supported by infrastructure activity, while broader private non-residential construction remained soft. “Despite the decline in earnings, underlying demand trends remain generally favorable,” Jafroodi said. He added that wet weather in certain regions and scheduling and delivery delays on several customer projects, including data center-related projects, slowed shipments during the quarter.
The company views those delays as timing-related rather than evidence of weaker demand. Margins pressured by higher costs Average selling prices rose 8.1% from the prior-year quarter and 2.3% sequentially, reflecting pricing actions taken over the past year to offset higher steel wire rod, freight and operating costs. However, Jafroodi said gross profit declined to…