Insteel's Q4 profit declines as rising costs outweigh higher selling prices, shipments

Overview

• US steel wire products maker's fiscal Q4 sales rose 17.9% year-over-year

• Net earnings and EPS for fiscal Q4 declined from a year earlier

• Company consolidated welded wire operations, incurring restructuring charges in Q4

Outlook

• Insteel expects capital expenditures of about $30 mln for fiscal 2027

• Company expects continued growth in engineered structural mesh shipments through 2027

• Insteel sees cost reductions from welded wire operations consolidation in 2027

Result Drivers

• HIGHER SELLING PRICES - Co said Q4 sales growth was driven by higher average selling prices implemented in response to increased raw material, freight and operating costs

• SHIPMENT VOLUME - Co said shipments increased 10.6% in Q4, largely due to an additional week in its fiscal calendar and a broader engineered structural mesh customer base

• COST PRESSURES - Co said gross margin declined due to higher raw material costs and inflationary trends affecting freight and operating costs that outpaced higher average selling prices

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the construction supplies & fixtures peer group is "buy."

• Wall Street's median 12-month price target for Insteel Industries Inc is $39.00, about 28.3% above its October 21 closing price of $30.39

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 14 three months ago

Reuters Recommended Reads

• Oct 21 - Reliance Q3 sales jump 43% on higher steel prices, border wall project ramp-up

• Oct 20 - Copper tube maker Mueller Industries' Q3 revenue rises on higher volumes

• Oct 20 - General Motors' Q3 revenue, adj EPS beat on North America performance

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)