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

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q4 Sales

$209.3 mln

$201.31 mln (2 Analysts)

Q4 EPS

$0.40

$0.49 (2 Analysts)

Q4 Net Earnings

$7.7 mln

$9.45 mln (2 Analysts)


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.)

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.