Atkore Inc Reports Fiscal Q3 2024 Financial Results
Intellectia.AI2024-08-06
Atkore Inc. Reports Fiscal Q3 2024 Financial Results
Atkore Inc. (NYSE: ATKR) announced its financial results for the fiscal third quarter ended June 28, 2024.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Year-over-Year Change |
|---|---|---|---|
| Net Sales | $822.4 million | $919.1 million | -10.5% |
| Net Income | $123.4 million | $201.3 million | -38.7% |
| Adjusted EBITDA | $206.1 million | $270.3 million | -23.7% |
| Net Income per Diluted Share | $3.33 | $5.13 | -35.1% |
| Adjusted Net Income per Diluted Share | $3.80 | $5.72 | -33.6% |
Interpretation: Atkore faced a challenging quarter with significant declines in both revenue and profitability year-over-year. Net sales decreased by 10.5%, primarily due to lower average selling prices and slight reductions in sales volume. Net income per diluted share also took a substantial hit, dropping by 35.1% compared to the same period last year. Adjusted EBITDA margin remains over 25% but showed a 23.7% decline, signaling decreased profitability.
Segment Performance
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Year-over-Year Change | Q3 2024 Adjusted EBITDA | Q3 2023 Adjusted EBITDA | Year-over-Year Change |
|---|---|---|---|---|---|---|
| Electrical | $606.0 million | $705.6 million | -14.1% | $182.6 million | $266.6 million | -31.5% |
| Safety & Infrastructure | $217.0 million | $213.6 million | 1.6% | $30.0 million | $21.5 million | 39.8% |
Interpretation: The Electrical segment experienced a notable downturn, with a 14.1% decrease in net sales and a 31.5% decrease in Adjusted EBITDA. This was primarily driven by a decline in average selling prices. On the other hand, the Safety & Infrastructure segment showed healthy growth, with a 1.6% increase in net sales and a 39.8% increase in Adjusted EBITDA, largely due to higher sales volumes and beneficial solar tax credits.
Comments from Company's Officers
"Atkore delivered Adjusted EBITDA margins over 25% on essentially flat volume compared to the prior year," said Bill Waltz, Atkore President and CEO. He noted that despite the challenges in the Electrical segment, the Safety & Infrastructure segment has shown significant operational improvements. Waltz also acknowledged the subdued demand from the construction sector and a soft pricing environment, which impacted third-quarter results. However, he expressed confidence in Atkore's strategic direction and resilience.
Dividends and Share Repurchase Program
On July 31, 2024, Atkore's Board of Directors declared a quarterly cash dividend of $0.32 per share, payable on August 30, 2024, to stockholders of record on August 20, 2024. The company also repurchased $125 million in shares as part of its capital deployment strategy during the third quarter.
Forward Guidance
The full-year Adjusted EBITDA outlook has been revised to $772 - $782 million, and Adjusted net income per diluted share is expected to range between $14.30 and $14.52.
Stock Price Movement
Post-earnings release, Atkore's stock saw a decrease of 4.21%, indicating market concerns over the company's near-term outlook and financial performance.
Atkore continues to focus on its strategic initiatives, despite difficult market conditions and lower-than-expected performance in its Electrical segment. The company remains committed to its long-term growth and operational efficiency, underpinning its strategy with robust capital deployment and dividend initiatives.
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