Loading...
01/11 03:36
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: financial performance and market strategy show positive growth in key areas like Waterworks and HVAC, but challenges in residential construction and remodel markets temper enthusiasm. While guidance indicates low to mid-single-digit growth, uncertainties in pricing, inflation, and residential sectors create a balanced outlook. The Q&A reveals healthy backlogs and strategic focus but lacks clarity on specific challenges, suggesting a neutral sentiment with potential for slight positive or negative adjustments.
Sales $8.5 billion increased 6.9% over prior year, driven by organic growth of 5.8% and acquisition growth of 1.1%.
Gross Margin 31.7% increased 70 basis points over the prior year.
Operating Profit $972 million grew 13.4% over last year.
Diluted Earnings Per Share $3.48 increased 16.8% over prior year.
Net Debt-to-EBITDA 1.1x remained strong.
U.S. Net Sales Increased 7.1%, driven by strong growth in nonresidential markets.
Residential Revenue Flat in the quarter due to weakened new construction starts and permit activity as well as soft demand in repair, maintenance, and improvement.
Nonresidential Revenue Grew approximately 15%, with 17% growth in commercial and 13% in civil infrastructure end markets.
HVAC Revenue Slightly down due to softer market conditions impacted by the industry's transition to new efficiency standards and weak new residential construction activity.
Residential Trade Plumbing Revenues Decreased 2% due to headwinds in new construction and ongoing PVC price deflation.
Ferguson Home Revenue Grew 3% in the fourth quarter.
Commercial Mechanical Revenue Grew 21%.
Waterworks Revenue Increased 15%.
Industrial, Fire & Fabrication and Facilities Supply Revenue Combined net sales growth of 5%.
Full Year Revenue $30.8 billion, 3.8% ahead of last year.
Full Year Operating Profit $2.84 billion, up 0.6%, representing a 9.2% operating margin.
Full Year Diluted Earnings Per Share $9.94, a 2.6% increase over last year.
Operating Cash Flow $1.9 billion, allowing continued investments in growth areas.
Return to Shareholders $1.4 billion via dividends and share repurchases during the year.
Residential End Markets Declined approximately 3% due to weak new construction and softer RMI markets, but organic revenue was up 1%.
Nonresidential Markets Approximately flat, but delivered 6% organic growth for the year.
HVAC Revenue (Full Year) Increased 8%, driven primarily by organic growth and approximately 1% from acquisitions.
Waterworks Revenue (Full Year) Grew 10%, driven by diversification efforts and addressing aging infrastructure.
Net Sales (U.S. Segment) Grew 7.1% with an organic increase of 6.1% and a 1% contribution from acquisitions.
Net Sales (Canada Segment) 4.8% above last year, with organic growth of 0.3% and a 4.9% contribution from acquisitions.
Full Year Gross Margin 30.7%, up 20 basis points.
EBITDA Approximately $3.1 billion, up $44 million on the prior year.
Free Cash Flow $1.654 billion, an increase of $132 million over the prior year.
HVAC expansion: Revenue increased 8% for the year, driven by organic growth and acquisitions. Completed over 600 dual trade counter conversions, nearing the goal of 650 by early 2026. Recent acquisitions in Atlanta and Chicago strengthened the HVAC strategy.
Ferguson Home: Launched in February, combining residential building, remodel, and digital commerce into a unified brand. Accounts for 19% of U.S. sales and focuses on high-end projects, delivering 3% revenue growth in Q4.
Nonresidential market growth: Nonresidential revenue grew 15% in Q4, with 17% growth in commercial and 13% in civil infrastructure. Industrial grew 5%. For the year, nonresidential markets were flat, but Ferguson achieved 6% organic growth.
Residential market performance: Residential revenue was flat in Q4 due to weak new construction and soft demand in repair, maintenance, and improvement. For the year, residential markets declined 3%, but Ferguson achieved 1% organic growth.
Cost management and profit growth: Operating profit grew 13.4% in Q4 to $972 million, with a 16.8% increase in diluted EPS. For the year, operating profit was $2.84 billion, up 0.6%, with a 9.2% operating margin.
Capital allocation: Returned $1.4 billion to shareholders via dividends and share repurchases. Invested $300 million in CapEx and $300 million in working capital. Completed 9 acquisitions during the year.
Market positioning and diversification: Focused on HVAC and Waterworks diversification through acquisitions and geographic expansion. Strengthened expertise in water and wastewater treatment plant design with recent acquisitions.
Large capital projects: Leveraged capabilities in underground waterworks, commercial and industrial PVF, and fire protection to support data centers, manufacturing, and healthcare facilities. Achieved 7% total nonresidential growth for the year.
Residential End Market: Subdued due to weakened new construction starts, permit activity, and soft demand in repair, maintenance, and improvement. Residential revenue was flat in the quarter.
HVAC Revenue: Slightly down due to softer market conditions, impacted by the industry's transition to new efficiency standards and weak new residential construction activity.
Residential Trade Plumbing Revenues: Decreased 2% due to headwinds in new construction and ongoing PVC price deflation.
Economic Environment: Operating in an uncertain environment, which could impact medium-term market confidence and growth.
Commodity-Related Categories: Deflation in certain commodity-related categories, particularly early in the year, slightly impacted pricing.
Interest Expense: Expected to be between $180 million to $200 million, which could impact financial performance.
Market Uncertainty: General uncertainty in the market environment, which could affect strategic execution and growth.
Revenue Growth: Mid-single-digit revenue growth expected for calendar year 2025.
Operating Margin: Operating margin range projected between 9.2% to 9.6% for calendar year 2025, reflecting an improvement of 10 to 50 basis points over the prior year.
Interest Expense: Expected to be between $180 million to $200 million for calendar year 2025.
Effective Tax Rate: Estimated to be approximately 26% for calendar year 2025.
Capital Expenditures (CapEx): Projected to range between $300 million to $350 million for calendar year 2025.
Market Outlook: Confidence in medium-term market attractiveness despite current uncertainties, leveraging multiyear tailwinds in residential and nonresidential markets.
HVAC Expansion: Continued focus on dual trade counter conversions, geographic expansion, and strategic acquisitions to support HVAC growth, with a goal of completing 650 counter conversions by early 2026.
Waterworks Diversification: Ongoing investments in water and wastewater treatment capabilities, including recent acquisitions to strengthen expertise in infrastructure and treatment plant design.
Large Capital Projects: Positioned to capitalize on onshoring and restoring initiatives, with a focus on data centers, manufacturing operations, and healthcare facilities.
Ferguson Home: Continued rollout and investment in Ferguson Home to enhance customer experience and support high-end residential projects.
Dividends returned to shareholders: $1.4 billion returned to shareholders via dividends and share repurchases during the year.
Quarterly dividend: $0.83 per share declared for the quarter, representing a 5% increase over the prior year.
Share repurchases: $948 million returned to shareholders via share repurchases this year, reducing share count by approximately 5 million.
Outstanding share repurchase program: Approximately $1 billion remains outstanding under the current share repurchase program.
The earnings call summary and Q&A indicate several concerns: a slowdown in Q4 growth due to residential and HVAC market pressures, unclear guidance for early 2026, and vague responses regarding large projects and HVAC recovery. While there is optimism for long-term growth, the immediate outlook is uncertain, with only modest margin improvements expected. The negative sentiment is compounded by the lack of specific guidance and ongoing market challenges, suggesting a likely negative stock price reaction over the next two weeks.
The earnings call presents a mixed picture: financial performance and market strategy show positive growth in key areas like Waterworks and HVAC, but challenges in residential construction and remodel markets temper enthusiasm. While guidance indicates low to mid-single-digit growth, uncertainties in pricing, inflation, and residential sectors create a balanced outlook. The Q&A reveals healthy backlogs and strategic focus but lacks clarity on specific challenges, suggesting a neutral sentiment with potential for slight positive or negative adjustments.
The company's earnings call reflects positive financial performance, with strong organic growth, increased gross margin, and a significant rise in EPS. The strategic initiatives, such as acquisitions and share repurchases, are boosting shareholder value. Despite some uncertainties in the market and management's vague responses in the Q&A, the overall sentiment is positive, supported by a 5% increase in quarterly dividends and robust cash flow. The positive outlook in the HVAC and Waterworks segments also contributes to a favorable stock price reaction.
The earnings call summary presents a mixed picture. While there are positive elements like the increase in dividends and share repurchase program, challenges such as supply chain issues, regulatory pressures, and competitive market conditions balance these out. The financial performance shows a modest increase in net sales but a decline in operating profit and gross margin. The Q&A session reveals concerns about deflation and margin pressures, with unclear management responses exacerbating uncertainties. Without a clear market cap, the lack of strong catalysts or negative factors suggests a neutral stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
