Economic headwinds and bad weather conspired to cut construction activity, which in turn ate into results at Concrete Pumping Holdings (NASDAQ: BBCP).
Shares of the multinational concrete provider traded down 17% as of 11 a.m. ET after the company reported results that fell short of Wall Street expectations.
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Headwinds weigh on results
Concrete Pumping plays a key part in the construction supply chain, providing concrete and concrete waste management services at job sites in the U.S. and in the United Kingdom. But there is only so much the company can do when demand for concrete slows, a scenario that played out in the most recent quarter.
The company lost $0.01 per share on revenue of $93.96 million in its fiscal second quarter ending April 30, compared to Wall Street’s forecast for a $0.04 per-share profit on sales of $99 million. Concrete Pumping did a good job keeping costs in line and gross margin is actually up slightly for the first six months of fiscal 2025 compared to a year ago, but the macro story was too much to overcome.
“In the second quarter, we continued to navigate a challenging construction environment, marked by persistent macroeconomic headwinds and regional weather disruptions,” CEO Bruce Young said in a statement.
Management is not anticipating an immediate bounce back. Concrete Pumping cut its full-year revenue forecast to $380 million to $390 million, from $425 million to $445 million, saying it is not forecasting a “meaningful” recovery in the construction market until its fiscal 2026.
Is Concrete Pumping stock a buy?
Even with the declines, Concrete Pumping is still a long-term winner, up 62% over the past five years. The company has a lot of debt, $387 million at quarter’s end, compared to a market capitalization of $317 million, but management remains confident enough in cash flows to pursue opportunistic acquisitions and boost its share buyback program by $15 million.
For investors who are bullish long-term on the need for infrastructure revitalization in the U.S. and Western Europe and who are willing to ride out a near-term storm, this decline in Concrete Pumping shares could be viewed as a buying opportunity.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
